Services Pre PNM Assignment

This is a very large assignment that must be completed in one week, I also know that it has already been submitted before. This is Masters level work, please contact me asap with a quote. One document is the scenario and the other will be turned in it is macro enabled so the spreadsheets are usable. I could use some help with the analysis portions.

PROC 5870 Services Pre PNM Exercise Due Week 8 TEMPLATE GUIDE

General comments:

This template was developed to assist you in working through the exercise addressing the concepts and cost elements associated with the Services Pre-PNM assignment. You will find the proposed and objective portions of the total cost element table completed for you as well as entries in the tables addressing the individual cost elements. Make sure you look at each one carefully to see what is missing and need to
complete the optimistic and pessimistic positions
. To save some effort,
in the total cost area under III you only need to plug in the dollars you would propose for the pessimistic – you can explain the rationale in the supporting narrative for each of the cost elements, you do not have to present the buildup in the table.
(This also allows the table to fit on the page!). Remember there are four positions presented in this pre-PNM: the contractor’s proposed, the objective/target where we think we will end up, the optimistic if everything goes our way and the pessimistic worst case scenario.

You may answer the “questions for thought and comment” outside of the PNM document if you wish, or because of the manner in which Mr. Bitner (course developer) presents the in the case, you are welcome to address the questions where they appear in the pre-PNM discussion. All the questions I require you to address are listed in this template in the pertinent areas so if you just work from this template you will cover everything you need to complete. All three assignments are included in this template –Assignment 1 is the pre PNM and questions, Assignments 2 and 3 following the PNM. Throughout the template I have added some extra reminders and/or notes to help you. In exercise 3 for example you are provided the formulas and a table to use for calculating the final CPIF based on an underrun (undertarget cost).

Remember from your first PNM there are cases when the target (most likely objective) and pessimistic positions could be the same; likewise, sometimes the proposed and objective are the same, or your optimistic is the same as the objective.
To save time on this case, assume any allowed questioned or unsupported areas of the contractor proposal could be supported and/or defended by the contractor at the prices proposed for a pessimistic position.
Remember however, if there had been unallowed costs these should not be part of any of your negotiating positions and would never be permitted.

In the fee area you are not asked to present a weighted guideline analysis but know that in practice you would actually include that calculation to support your fee position. Likewise you are not asked to work through a capital cost of money. For both you may just accept what is provided as sufficient.

Be sure to remove my comments as you write your narrative.

This project is worth 150 or the total 1,000 course points – you see noted in this template the point value for each area.

===============================================================================

SUBJECT: PRELIMINARY PRICE NEGOTIATION MEMORANDUM (PRE-PNM)

I. OVERVIEW (6 POINTS)

Enter narrative following the format of the PNM – remember key things about the acquisition and write it so that someone who doesn’t know anything about the action has a good understanding of what you plan to do and why. Look at the score sheet from your first PNM to help you hit the highlights.

II. COST ANALYSIS SUMMARY (2 POINTS)

A. The contractor’s proposal price is $____________ The government objective is __________ with an optimistic of $___________ and pessimistic of $___________ (as stated below). __________ The objective determinations were based on ____________________________. See Section IV to see how these objectives were determined.

III. TOTAL COSTS: (5 POINTS)

1999, 2000 and 2001 Totals:
IV. PARTICULARS AND FACT FINDING

Comment: look at the summary table in developing the particulars and use them as presented. Frequently in negotiations we find there is nothing wrong with the positions but the numbers are different due to rounding – I have created a bit of that in this exercise. Just use the numbers provided.

For the database analyst II I want you to use some creative writing to come up with the objective I have provided of 4,160 hours reflected in the summary table above. The point here is to understand that even when DCAA and the technical personnel provide input ultimately the Contracting Officer has to document and then negotiation to what they believe is best. Reflect on concepts you have learned in this course and come up with a plausible reason for this position.

A. LABOR: (8 POINTS)
i. ON-SITE:
1. Hours: The contractor proposed 8,320 hours per year for their analyst (application systems, programmer and database), 34,944 hours for computer support/operations and 17,472 for systems administration.

a. Questioned and or Unsupported Hours -.

i. Optimistic –

ii. Objective/Target (Most Likely to Negotiate) –

iii. Pessimistic –

2. Labor Rates:

PROPOSED

Questioned and or Unsupported Rates: .

OPTIMISTIC

a. Optimistic:

OJECTIVE/TARGET (MOST LIKELY)

b. Objective/Target (Most Likely to Negotiate

PESSIMISTIC

c. Pessimistic:

3. Costs: Per the hours and labor rates given above, below please find the total costs for all years.

Thoughts and Comments (3 POINTS FOR EACH QUESTION 9 POINTS)

1. In doing market research to assess the labor market and wage/salary trends for computer/information technology support, you noticed that support is increasingly being provided on a remote basis (vice on-site), thanks to improving technology. Being on-site to provide support is not as important as it used to be. How could you use that information?

2. What sources could you go to conduct this market research on the labor market?

3. (There are several sources of wage rate escalation factors. A widely-accepted source is Data Resources, Inc. (DRI). DRI rates are privately produced escalation factors based in part on BLS indices for material and labor, such as the Consumer Price Index and the PPI. DRI incorporates economic and social variables into their economic forecast models. DCAA recommended use of DRI escalation. The contractor proposes using DRI plus .5% due to the tight labor market. What would you do to resolve the DCAA recommendation and the proposed addition of .5% escalation?

ii. ON-CALL SUPPORT: (5 POINTS)

1. Hours: The contractor proposed the following hours per year based upon 1 person at each site.

a. Questioned and or Unsupported:
i. Optimistic –
.

ii. Objective/Target (Most Likely to Negotiate)

iii. Pessimistic –.

2. Labor Rates:

Position

PROPOSED

1999 Rate

2000 Rate

2001 Rate

Applics Sys Anal II

$ 38.10

$ 40.27

$ 42.53

Progr Analyst II

$ 39.77

$ 42.04

$ 44.39

Database Anal/Prog II

$ 25.13

$ 26.56

$ 28.05

a. Questioned and or Unsupported Rates:

.
b. Optimistic :

c. Objective/Target (Most Likely to Negotiate )

d. Pessimistic :

3. Costs: Per the hours and labor rates given above, below please find the total costs.

Position

PROPOSED

1999 Total

2000 Total

2001 Total

Applics Sys Anal II

$ 27,432.00

$ 33,826.80

$ 40,828.80

Progr Analyst II

$ 33,406.80

$ 40,358.40

$ 47,941.20

Database Anal/Prog II

$ 18,093.60

$ 22,310.40

$ 26,928.00

Yearly Totals

$ 78,932.40

$ 96,495.60

$ 115,698.00

3 Year Totals

$ 291,126.00

Thoughts and Comments: (3 POINTS EACH 21 POINTS TOTAL)

1. What quantitative analysis methods could you suggest to better assess whether there will be an increasing occurrence of failures?

2. What is the turnover rate for support personnel? If it is high, is learning starting all over again with new personnel? Why the high turnover? Is the contractor paying competitive wages/salaries? If there is high turnover and you negotiate “hard” to minimize the number of personnel, how could this impact performance risk?

3. In what ways could we DCAA support for our analysis of turnover? What specific request would you make to them? What is an example of a request that would be too general?

4. Why does introducing incentives on cost performance make sense in this situation?

5. What are the possibilities if we stated the requirement only in terms of the 2% downtime goal? Would the contractor have more freedom in how support was accomplished?

6. Would performance incentives be more or less motivating if requirements were restated this way? How could award fee be used? FPIF?

7. Discuss the possibility of endangering performance by overemphasizing cost control through incentives.

B. FRINGE: Make sure you comment on what DCAA said! (3 POINTS)

Thoughts and Comments: (3 POINTS EACH 21 POINTS TOTAL)

1. What costs are typically included in fringe?

2. What is one reason that fringe would specifically be identified in the proposal, as opposed to just being included as part of the overhead?

3. Where could you find out what the Dept of Labor minimum wages and fringe are for in your area?

4. Discuss why contracting officer involvement in fringe issues differs significantly based on whether contract administration has been delegated to DCMC or not.

5. Where could you go to get information on fringe costs? Allowability policy? Calculating an indirect cost? DCAA guidance?

6. What are the implications of whether this contract is CAS covered or not?

7. If the company experienced a significant decline in its business base and workforce, how might this impact its cost of fringe benefits per labor hour?

C. OVERHEAD: .For the overhead calculation both on site and on call labor dollars are added together from the total cost summary sheet and reflects both on-site and on call labor. (3 POINTS)

1999 Proposed Total

2000 Proposed Total

2001 Proposed Total

Proposed Total Costs

TOTAL LABOR COST

$ 2,337,503

$ 2,387,308

$ 2,520,996

$ 7,166,873

OVERHEAD

35%

50%

OVERHEAD TOTALS

$ 790,499

$ 1,193,654

$ 1,260,498

$ 3,244,651

Thoughts and Comments: (3 POINTS EACH 9 POINTS TOTAL)

1. What costs are typically included in overhead?

2. Discuss common indirect cost rate misunderstanding; i.e., assessing a rate as too high or too low without understanding the composition and costs included in its pool and base.

3. If a company is doing business predominantly with Government and its Government business is declining, what would likely happen to its overhead rate?

D. MATERIAL AND PARTS: (5 POINTS)

Presented in Proposal

Material Proposed

1999

Rate

1999

2000 Rate

2000

2001 Rate

2001

Totall

Scheduled

$200,000.

0.941

$225,816.00

0.930

$204,514.00

$630,330.00

Unscheduled

1.261

$151,320

1.261

$190,815

1.284

$245,082

$587,217

Minor enhancements

1.358

$40,740

1.358

$55,325

1.383

$76,525

$172,590

Miscellaneous

1.067

$8,536

1.067

$9,108

1.087

$9,898

$27,542

TOTAL MATERIAL

$400,596

$481,063

$536,020

$1417,679

Material Growth Factors:

Be sure to explain what the escalations are based upon also note what was presented in the proposal and what was cited in the DCAA report as proposed growth factors… what do you think happened here as they are not the same – comment in your PNM.

The following summarizes the proposed and recommended growth factors for materials supporting unscheduled maintenance, minor system enhancements, and miscellaneous use:

Material Growth Factors – Proposed

1999

2000

2001

Unscheduled

1.30

Minor Enhancements

1.40

Miscellaneous

1.10

Material Growth Factors – Govt Objective

1999

2000

2001

Unscheduled

1.00

1.05

1.10

Minor Enhancements

1.00

0.25

Miscellaneous

1.05

Material

1999 Optimistic Rate

1999 Optimistic $

2000 Optimistic . Rate

2000 Optimistic $

2001 Optimistic Rate

2001 Optimistic $

Optimistic Total $

Scheduled

Unscheduled

1.00

1.05

1.10

Minor enhancements

1.00

0.25

Miscellaneous

1.05

TOTAL MATERIAL

i. Optimistic:

Material

1999 Target/Objective Most Likely to Negotiate Rate

1999 Target/Objective Most Likely to Negotiate

2000 Target/Objective Most Likely to Negotiate Rate

2000 Target/Objective Most Likely to Negotiate $

2001 Target/Objective Most Likely to Negotiate Rate

2001 Target/Objective Most Likely to Negotiate $

Target/Objective Most Likely to Negotiate Total $

Scheduled

$ 200,000

$225,816

$ 204,514

Unscheduled

$ 116,400

$118,553

$ 128,844

Minor enhancements

$ 29,100

$28,227

$ 6,972

Miscellaneous

$ 8,148

$8,299

$ 8,609

TOTAL MATERIAL

$ 353,648

$380,895

$ 348,939

ii. Objective/Target (Most Likely to Negotiate):

Locate the rates to complete the table above from the cost summary at the beginning of the PNM!

Material

1999 Pessimistic Rate

1999 Pessimistic $

2000 Pessimistic Rate

2000 Pessimistic $

2001 Pessimistic

Rate

2001 Pessimistic

Pessimistic Total $

Scheduled

Unscheduled

Minor enhancements

Miscellaneous

TOTAL MATERIAL

iii. Pessimistic:

E. GENERAL AND ADMINISTRATIVE (G & A) COSTS: (2 POINTS)

You may enter a table here or just discuss the proposed, objective, optimistic and pessimistic rates.

Thoughts and Comments: (3 POINTS)

1. What costs are typically included in G&A?

F. TARGET FEE: The proposed fee given by McGhee is 11% (pessimistic outcome). We will offer 9% (optimistic and most likely to negotiate target) based on the calculated weighted guidelines. (5 POINTS)

Thoughts and Comments: (3 POINTS EACH 12 POINTS TOTAL)

1. Why is it very likely that a service oriented company would not propose Facilities Capital Cost of Money?

2. Discuss how the Weighted Guidelines could be used to develop a minimum and maximum fee; and how with share ratios pessimistic and optimistic costs could be calculated.

3. Discuss how the minimum and maximum fee could be calculated given share ratios and optimistic/pessimistic costs.

4. Discuss how the dollar amount of potential share (over or under) must be enough to provide effective incentive.

G. CPIF SHARE RATIOS: (2 POINTS)
.
i. Optimistic

ii. Objective/Target (Most Likely to Negotiate):

iii. Pessimistic:

Thoughts and Comments: (3 POINTS EACH 12 POINTS TOTAL)

1. It may be worthwhile to review the difference between the proposed 90/10 and 70/30 ratios. Why does it make sense that the

contractor would propose 90/10 given its anticipation of future breakdowns?

2. Prompt clarifying discussion on why the most likely causes of over target costs are a significant factor in determining the over target share.

3. Ask what yourself questions you would raise as the contracting rep on an IPT doing an acquisition strategy planning session.

4. Discuss where you would go for guidance/policy on incentive contracts.

H. OPTIMISTIC/PESSIMISTIC COST: Please see the optimistic/pessimistic costs given above. (2 POINTS)

i. Optimistic

ii. Objective/Target (Most Likely to Negotiate):
.
iii. Pessimistic:

Thoughts and Comments: (3 POINTS)

1. Ask what type of contract the CPIF effectively becomes once incurred costs hit pessimistic cost.

ATTACHMENTS: (2 POINTS)

What kind of attachments would you think would be provided?

Anything else you would need to “put on” the PNM (assume it doesn’t have all the instructor Q&A and is a real pre PNM—there is something special that you need to make sure you place on the document. Check your score sheet for the first PNM if you are in doubt!

ASSIGNMENT 2: (5 POINTS)

Y2K Testing and BRAC! Three months after contract award, DoD mandates Y2K testing of all computer systems be accomplished within the next four months. In addition, both computer center operations are to be combined at Fogleman AFB and the combination completed by Jan 2001! The contracting officer notifies McGhee Systems in writing to start support of the Y2K testing immediately. The contracting officer sends a separate letter notifying McGhee Systems to submit a combined proposal for both the added Y2K effort and for combining and continuing computer center support. McGhee Systems submits the equitable adjustment proposal. Your technical folks have alerted you that since contract award the contractor has reduced its staff….and that it has not impacted performance a bit! You look at the contractor’s proposal. Regarding the combination of computer centers, they are proposing simply adding the staffs because the work will double when combined. They are also proposing that since we just negotiated a fair and reasonable price, we can just use the recent proposal (skill mix and quantities and rates) as a basis for negotiation. Identify and discuss two primary issues that you will pursue in your analysis.
Two primary issues I will pursue in my analysis of the request for equitable adjustment will include:
1.
.
2.

ASSIGNMENT 3: The contract is complete. Final CPIF Price. Using your CPIF Target Cost/Fee and incentive elements from Assignment 1 (assume the equitable adjustment never occurred), what is the final CPIF price if McGhee Systems experienced final incurred cost of $700,000 under target cost.
Remember there are minimum and maximum fees (5 POINTS)

27 of 27
1999 Costs

On-Site Support Proposed Hrs./Yr. Esc. 1999 Rate 1999 Proposed Total Proposed Totals Optimistic Hrs/Yr. Esc. 1999 Rate 1999 Optimistic Total OPTIMISTIC TOTALS OBJ Esc. 1999 Rate 1999 Obj Total OBJECTIVE Target TOTALS Pessimistic
Application Systems Analyst II 8,320 1.056 $ 25.40 $ 211,339 8,320 1.056 $ 25.40 $ 211,339 $
Programmer Analyst II 8,320 1.056 $ 26.51 $ 220,586 8,320 1.056 $ 26.51 $ 220,586 $
Database Analyst II 8,320 1.056 $ 16.75 $ 139,396 4,160 1.056 $ 16.75 $ 69,698 $
Computer Support/Operations II 34,944 1.056 $ 29.51 $ 1,031,273 34,944 1.056 $ 29.51 $ 1,031,273 $
Systems Administration 17,472 1.056 $ 37.54 $ 655,975 17,472 1.056 $ 37.54 $ 655,975 $
On-Call Support $
Application Systems Analyst II 720 $ 38.10 $ 27,433 360 $ 38.10 $ 13,717 $
Programmer Analyst II 840 $ 39.77 $ 33,406 240 $ 39.77 $ 9,545 $
Database Analyst II 720 $ 25.13 $ 18,095 240 $ 25.13 $ 6,032 $
Total Labor 79,656 $ 2,337,503 74,056 $ 2,218,164 $
Fringe $ 1.47 $ 113,743 $ 1.47 $ 107,628 $
Overhead 35% $ 790,499 35% $ 766,105 $
$
Material Growth Factors $
Scheduled $200,000 $ 200,000 $
Unscheduled 1.261 $151,320 0.970 $ 116,400 $
Minor Enhancements 1.358 $40,740 0.970 $ 29,100 $
Misc 1.067 $8,536 1.019 $ 8,148 $
Total Material $400,596 $ 353,648 $
Total Support Cost $ 3,642,341 $ 3,445,545 $
$
G&A 15% $ 546,351 15% $ 516,832 $
$
Target Cost $ 4,188,692 $ 3,962,376 $
Target Fee 11% $ 460,756 9% $ 356,614 $
Target Price $ 4,649,448 $ 4,318,990 $
Minimum Fee 90/10 $ 418,869 80/20 $ 237,743 $
Maximum Fee 70/30 $ 661,813 80/20 $ 183,410 $
Optimistic Cost 84% $ 3,518,501 84% $ 483,410 $
Pessimistic Cost 110% $ 4,607,561 115% $ 3,328,396 $
Contractor Share Ratio Over 10% 20% %
Contractor Share Ratio Under 30% 20% %

On-Site Support
Proposed
Hrs./Yr.
2000
Rate
2000
Proposed
Total
Proposed
Totals
Optimistic
Hrs/Yr.
2000
Rate
2000
Optimistic
Total
Optimisti
c Totals
OJB
2000
Rate
2000
Objectiv
e/Target
Target
Objective
Totals
2000
Pessimisti
c
Application Systems Analyst
II
8,3201.057 $26.85 223,386$ 8,3201.057 $ 26.85 $ 223,386 $
Programmer Analyst II
8,3201.057 $28.02 233,159$ 8,3201.057 $ 28.02 $ 223,159 $
Database Analyst II
8,3201.057 $ 17.71 147,342$ 4,1601.057 $ 17.71 $ 73,671 $
Computer
Support/Operations II
34,9441.057 $ 31.19 1,090,055$ 34,9441.057 $ 31.19 $ 1,090,055 $
Systems Administration
17,4721.057 $39.68 693,366$ 17,4721.057 $ 39.68 $ 693,289 $
On-Call Support
$
Application Systems Analyst
II
840 $40.27 33,830$ 360 $ 40.27 $ 14,497 $
Programmer Analyst II
960 $42.04 40,354$ 240 $ 42.04 $ 10,089 $
Database Analyst II
840 $26.56 22,314$ 240 $ 26.56 $ 6,375 $
Total Labor
80,0162,483,806$ 74,0562,344,599$
$
Fringe
$ 1.47
113,743$
$ 1.47
107,628$
$
Overhead
50%
1,193,654$
47%
1,087,409$
$
$
Material Growth Factors
$
Scheduled0.94$225,8160.941225,816$
$
Unscheduled1.261$190,8151.019118,553$
$
Minor Enhancements1.358$55,3250.97028,227$
$
Misc1.067$9,1081.0198,299$
$
Total Material481,064$ 380,895$
$
Total Support Cost4,272,267$ 3,920,531$
$
$
G&A25%1,068,067$ 23%901,722$
$
$
Target Cost5,340,333$ 4,822,253$
$
Target Fee11%587,437$ 9%434,003$
$
Target Price5,927,770$ 5,256,256$
$
Minimum Fee 90/10534,033$ 80/20289,335$
$
Maximum Fee 70/30843,773$ 80/20588,315$
$
Optimistic Cost84%4,485,880$ 84%4,050,693$
$
Pessimistic Cost 110%5,874,367$ 115%5,545,591$
$
Contractor Share Ratio Over10%20%%
Contractor Share Ratio Under30%20%%
2000 Costs

On-Site Support Proposed Hrs./Yr. Esc. 2000 Rate 2000 Proposed Total Proposed Totals Optimistic Hrs/Yr. Esc. 2000 Rate 2000 Optimistic Total Optimistic Totals OJB Esc. 2000 Rate 2000 Objective/Target Target Objective Totals 2000 Pessimistic
Application Systems Analyst II 8,320 1.057 $ 26.85 $ 223,386 8,320 1.057 $ 26.85 $ 223,386 $
Programmer Analyst II 8,320 1.057 $ 28.02 $ 233,159 8,320 1.057 $ 28.02 $ 223,159 $
Database Analyst II 8,320 1.057 $ 17.71 $ 147,342 4,160 1.057 $ 17.71 $ 73,671 $
Computer Support/Operations II 34,944 1.057 $ 31.19 $ 1,090,055 34,944 1.057 $ 31.19 $ 1,090,055 $
Systems Administration 17,472 1.057 $ 39.68 $ 693,366 17,472 1.057 $ 39.68 $ 693,289 $
On-Call Support $
Application Systems Analyst II 840 $ 40.27 $ 33,830 360 $ 40.27 $ 14,497 $
Programmer Analyst II 960 $ 42.04 $ 40,354 240 $ 42.04 $ 10,089 $
Database Analyst II 840 $ 26.56 $ 22,314 240 $ 26.56 $ 6,375 $
Total Labor 80,016 $ 2,483,806 74,056 $ 2,344,599 $
Fringe $ 1.47 $ 113,743 $ 1.47 $ 107,628 $
Overhead 50% $ 1,193,654 47% $ 1,087,409 $
$
Material Growth Factors $
Scheduled 0.941 $225,816 0.941 $ 225,816 $
Unscheduled 1.261 $190,815 1.019 $ 118,553 $
Minor Enhancements 1.358 $55,325 0.970 $ 28,227 $
Misc 1.067 $9,108 1.019 $ 8,299 $
Total Material $ 481,064 $ 380,895 $
Total Support Cost $ 4,272,267 $ 3,920,531 $
$
G&A 25% $ 1,068,067 23% $ 901,722 $
$
Target Cost $ 5,340,333 $ 4,822,253 $
Target Fee 11% $ 587,437 9% $ 434,003 $
Target Price $ 5,927,770 $ 5,256,256 $
Minimum Fee 90/10 $ 534,033 80/20 $ 289,335 $
Maximum Fee 70/30 $ 843,773 80/20 $ 588,315 $
Optimistic Cost 84% $ 4,485,880 84% $ 4,050,693 $
Pessimistic Cost 110% $ 5,874,367 115% $ 5,545,591 $
Contractor Share Ratio Over 10% 20% %
Contractor Share Ratio Under 30% 20% %

On-Site Support
Proposed
Hrs./Yr.
2001
Rate
2001
Proposed
Total
Proposed
Totals
Optimistic
Hrs/Yr.
2001
Rate
2001
Optimistic
Total
Optimistic
Totals
Obj
2001
Rate
2001 Obj
Total
Objective
Target Totals
Pessimistic
Application Systems Analyst II
8,3201.056 $ 28.35 235,895$ 8,320$ 1.056 $ 28.35 $ 235,895 $
Programmer Analyst II
8,3201.056 $ 29.59 246,216$ 8,320$ 1.056 $ 29.59 $ 246,216 $
Database Analyst II
8,3201.056 $ 18.70 155,593$ 4,160$ 1.056 $ 18.70 $ 77,796 $
Computer Support/Operations
II
34,9441.056 $ 32.94 1,151,098$ 34,944$ 1.056 $ 32.94 $ 1,551,098 $
Systems Administration
17,4721.056 $ 41.91 732,194$ 17,472$ 1.056 $ 41.91 $ 732,194 $
On-Call Support
$
Application Systems Analyst II
960 $ 42.53 40,828$ 480 $ 42.53 $ 20,414 $
Programmer Analyst II
1,080 $ 44.39 47,941$ 360 $ 44.39 $ 18,980 $
Database Analyst II
960 $ 28.05 26,930$ 360 $ 28.05 $ 10,099 $
Total Labor
80,3762,636,695$ 74,4162,489,693$
$
Fringe
$ 1.47
113,743$
$ 1.47
107,628$
$
Overhead
50%
1,260,498$
47%
1,148,304$
$
$
Material Growth Factors
$
Scheduled0.93$204,5140.93204,514$
$
Unscheduled1.284$245,0821.087128,844$
$
Minor Enhancements1.383$76,5250.2476,972$
$
Misc1.087$9,8981.0378,609$
$
Total Material536,020$ 348,939$
$
Total Support Cost4,546,956$ 4,094,564$
$
$
G&A25%1,136,739$ 23%941,750$
$
$
Target Cost5,683,695$ 5,036,313$
$
Target Fee11%625,207$ 9%453,268$
$
Target Price6,308,902$ 5,489,582$
$
Minimum Fee 90/10568,370$ 80/20302,179$
$
Maximum Fee 70/30898,024$ 8020614,430$
$
Optimistic Cost84%4,774,304$ 84%4,230,503$
$
Pessimistic Cost 110%6,252,065$ 115%5,791,760$
$
Contractor Share Ratio Over10%20%
%
Contractor Share Ratio Under30%20%
%
On-Site Labor Hours

Position Proposed Hrs./Yr. Proprosed Elements Optimistic Hrs/Yr. Variance Comments Most Likely to Negotiate Hrs/Yr. Variance Comments Pessimestic Hrs/Yr. Variance
Applications Systems Analyst II 8,320 2080hrs/yr. x 2 persons x 2 sites 6,240 25% Take away one person and have one person float between the 2 sites. 8,320 0% Accept as proposed, but use as an incentive to lower the costs 8,320 0%
Programmer Analyst II 8,320 2080hrs/yr. x 2 persons x 2 sites 6,240 25% Take away one person and have one person float between the 2 sites. 8,320 0% Accept as proposed, but use as an incentive to lower the costs 8,320 0%
Database Analysis II 8,320 2080hrs/yr. x 2 persons x 2 sites 6,240 25% Take away one person and have one person float between the 2 sites. 6,240 25% Take away one person and have one person float between the 2 sites. 8,320 0%
Computer Support/Operations II 34,944 ((2080hrs/yr. + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts 34,944 0% Accept as proposed, but use as an incentive to lower the costs 34,944 0% Accept as proposed, but use as an incentive to lower the costs 34,944 0%
Systems Administration 17,472 ((2080hrs/yr. + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts 17,472 0% Accept as proposed, but use as an incentive to lower the costs 17,472 0% Accept as proposed, but use as an incentive to lower the costs 17,472 0%
Total Hours per year 77,376 71,136 8% 75,296 3% 77,376 0%

On-Site Labor Costs

Position 1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Proposed Esc. 2001 Rate Optimistic Esc. 1999 Rate Optimistic Esc. 2000 Rate Optimistic Esc. 2001 Rate Proposed Hrs./Yr. Optimistic Hrs/Yr. 1999 Proposed Total 2000 Proposed Total 2001 Proposed Total Proposed Total Costs 1999 Optimistic Total 2000 Optimistic Total 2001 Optimistic Total Check Optimistic Total Target Objective Hrs/Yr. 1999 Most Likely Total 2000 Most Likely Total 2001 Most Likely Total Check Most Likely to Negotiate Total Pessimestic Hrs/Yr. 1999 Pessimesitc Total 2000 Pessimesitc Total 2001 Pessimesitc Total Check Total Pessimestic Total Costs Pessimistic Total
Applications Systems Analyst II $ 24.05 1.056 $ 25.40 1.057 $ 26.85 1.056 $ 28.35 1.051 $ 25.28 1.052 $ 26.59 1.051 $ 27.95 8,320 6,240 $ 211,339.00 $ 223,386.00 $ 235,895.00 $ 670,620.00 $ 157,725.67 $ 165,927.41 $ 174,389.70 $ 498,042.78 $ 498,042.78 8,320 $ 211,328.00 $ 223,392.00 $ 235,872.00 $ 670,592.00 $ 670,592.00 8,320 $ 211,328.00 $ 223,392.00 $ 235,872.00 $ 670,592.00 $ 670,592.00 $ 670,592.00
Programmer Analyst II $ 25.11 1.056 $ 26.51 1.057 $ 28.02 1.056 $ 29.59 1.051 $ 26.39 1.052 $ 27.76 1.051 $ 29.18 8,320 6,240 $ 220,586.00 $ 233,159.00 $ 246,216.00 $ 699,961.00 $ 164,677.41 $ 173,240.63 $ 182,075.90 $ 519,993.94 $ 519,993.94 8,320 $ 220,563.20 $ 233,126.40 $ 246,188.80 $ 699,878.40 $ 699,878.40 8,320 $ 220,563.20 $ 233,126.40 $ 246,188.80 $ 699,878.40 $ 699,878.40 $ 699,878.40
Database Analysis II $ 15.87 1.056 $ 16.75 1.057 $ 17.71 1.056 $ 18.70 1.051 $ 16.68 1.052 $ 17.55 1.051 $ 18.44 8,320 6,240 $ 139,396.00 $ 147,342.00 $ 155,593.00 $ 442,331.00 $ 104,079.27 $ 109,491.39 $ 115,075.45 $ 328,646.11 $ 328,646.11 6,240 $ 104,520.00 $ 110,510.40 $ 116,688.00 $ 331,718.40 $ 331,718.40 8,320 $ 139,360.00 $ 147,347.20 $ 155,584.00 $ 442,291.20 $ 442,291.20 $ 442,291.20
Computer Support/Operations II $ 27.95 1.056 $ 29.51 1.057 $ 31.19 1.056 $ 32.94 1.051 $ 29.38 1.052 $ 30.90 1.051 $ 32.48 34,944 34,944 $ 1,031,273.00 $ 1,090,055.00 $ 1,151,098.00 $ 3,272,426.00 $ 1,026,495.72 $ 1,079,873.50 $ 1,134,947.05 $ 3,241,316.28 $ 3,241,316.28 34,944 $ 1,031,197.44 $ 1,089,903.36 $ 1,151,055.36 $ 3,272,156.16 $ 3,272,156.16 34,944 $ 1,031,197.44 $ 1,089,903.36 $ 1,151,055.36 $ 3,272,156.16 $ 3,272,156.16 $ 3,272,156.16
Systems Administration $ 35.55 1.056 $ 37.54 1.057 $ 39.68 1.056 $ 41.91 1.051 $ 37.36 1.052 $ 39.31 1.051 $ 41.31 17,472 17,472 $ 655,975.00 $ 693,366.00 $ 732,194.00 $ 2,081,535.00 $ 652,807.21 $ 686,753.18 $ 721,777.60 $ 2,061,337.99 $ 2,061,337.99 17,472 $ 655,898.88 $ 693,288.96 $ 732,251.52 $ 2,081,439.36 $ 2,081,439.36 17,472 $ 655,898.88 $ 693,288.96 $ 732,251.52 $ 2,081,439.36 $ 2,081,439.36 $ 2,081,439.36
TOTAL $ 2,258,569.00 $ 2,387,308.00 $ 2,520,996.00 $ 7,166,873.00 $ 2,105,785.28 $ 2,215,286.12 $ 2,328,265.71 $ 6,649,337.11 $ 6,649,337.11 7% $ 2,223,507.52 $ 2,350,221.12 $ 2,482,055.68 $ 7,055,784.32 $ 7,055,784.32 2% $ 2,258,347.52 $ 2,387,057.92 $ 2,520,951.68 $ 7,166,357.12 $ 7,166,357.12 $ 7,166,357.12
OVERHEAD 35% 50% 50% 35% 47% 47% 35% 47% 47% 35% 50% 50%
OVERHEAD TOTALS $ 790,499.15 $ 1,193,654.00 $ 1,260,498.00 $ 3,244,651.15 $ 737,024.85 $ 1,041,184.47 $ 1,094,284.88 $ 2,872,494.21 $ 778,227.63 $ 1,104,603.93 $ 1,166,566.17 $ 3,049,397.73 $ 790,421.63 $ 1,193,528.96 $ 1,260,475.84 $ 3,244,426.43

2001 Costs

On-Site Support Proposed Hrs./Yr. Esc. 2001 Rate 2001 Proposed Total Proposed Totals Optimistic Hrs/Yr. Esc. 2001 Rate 2001 Optimistic Total Optimistic Totals Obj Esc. 2001 Rate 2001 Obj Total Objective Target Totals Pessimistic
Application Systems Analyst II 8,320 1.056 $ 28.35 $ 235,895 $ 8,320 1.056 $ 28.35 $ 235,895 $
Programmer Analyst II 8,320 1.056 $ 29.59 $ 246,216 $ 8,320 1.056 $ 29.59 $ 246,216 $
Database Analyst II 8,320 1.056 $ 18.70 $ 155,593 $ 4,160 1.056 $ 18.70 $ 77,796 $
Computer Support/Operations II 34,944 1.056 $ 32.94 $ 1,151,098 $ 34,944 1.056 $ 32.94 $ 1,551,098 $
Systems Administration 17,472 1.056 $ 41.91 $ 732,194 $ 17,472 1.056 $ 41.91 $ 732,194 $
On-Call Support $
Application Systems Analyst II 960 $ 42.53 $ 40,828 480 $ 42.53 $ 20,414 $
Programmer Analyst II 1,080 $ 44.39 $ 47,941 360 $ 44.39 $ 18,980 $
Database Analyst II 960 $ 28.05 $ 26,930 360 $ 28.05 $ 10,099 $
Total Labor 80,376 $ 2,636,695 74,416 $ 2,489,693 $
Fringe $ 1.47 $ 113,743 $ 1.47 $ 107,628 $
Overhead 50% $ 1,260,498 47% $ 1,148,304 $
$
Material Growth Factors $
Scheduled 0.93 $204,514 0.93 $ 204,514 $
Unscheduled 1.284 $245,082 1.087 $ 128,844 $
Minor Enhancements 1.383 $76,525 0.247 $ 6,972 $
Misc 1.087 $9,898 1.037 $ 8,609 $
Total Material $ 536,020 $ 348,939 $
Total Support Cost $ 4,546,956 $ 4,094,564 $
$
G&A 25% $ 1,136,739 23% $ 941,750 $
$
Target Cost $ 5,683,695 $ 5,036,313 $
Target Fee 11% $ 625,207 9% $ 453,268 $
Target Price $ 6,308,902 $ 5,489,582 $
Minimum Fee 90/10 $ 568,370 80/20 $ 302,179 $
Maximum Fee 70/30 $ 898,024 8020 $ 614,430 $
Optimistic Cost 84% $ 4,774,304 84% $ 4,230,503 $
Pessimistic Cost 110% $ 6,252,065 115% $ 5,791,760 $
Contractor Share Ratio Over 10% 20% %
Contractor Share Ratio Under 30% 20% %

Proposed
Hrs./Yr.
Proprosed Elements
Optimistic
Hrs/Yr.
Proposed Elements
Objective
Hrs/Yr.
Proposed Elements
Pessimestic
Hrs/Yr.
Proposed Elements
8,320
2080hrs/yr. x 2 persons
x 2 sites
8,320
2080hrs/yr. x 2 persons
x 2 sites
8,320
2080hrs/yr. x 2 persons
x 2 sites
34,944
((2080hrs/yr. + (16hrs x
52wks)) x 2 persons x 2
sites x 3 shifts
17,472
((2080hrs/yr. + (16hrs x
52wks)) x 2 persons x 2
sites x 3 shifts
77,376
On-Site Labor Hours

Position Proposed Hrs./Yr. Proprosed Elements Optimistic Hrs/Yr. Proposed Elements Objective Hrs/Yr. Proposed Elements Pessimestic Hrs/Yr. Proposed Elements
Applications Systems Analyst II 8,320 2080hrs/yr. x 2 persons x 2 sites
Programmer Analyst II 8,320 2080hrs/yr. x 2 persons x 2 sites
Database Analysis II 8,320 2080hrs/yr. x 2 persons x 2 sites
Computer Support/Operations II 34,944 ((2080hrs/yr. + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts
Systems Administration 17,472 ((2080hrs/yr. + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts
Total Hours per year 77,376

On-Site Labor Costs

Position 1999 Rate 2000 Rate 2001 Rate Proposed Hrs./Yr. Proposed Costs Optimistic Hrs/Yr. Optimistic Target Objective Hrs/Yr. Objective Pessimestic Hrs/Yr. Pessimistic
Applications Systems Analyst II $ 25.40 $ 26.85 $ 28.35 8,320 $ 670,592.00 6,240 8,320 8,320
Programmer Analyst II $ 26.51 $ 28.02 $ 29.59 8,320 $ 699,878.40 6,240 8,320 8,320
Database Analysis II $ 16.75 $ 17.71 $ 18.70 8,320 $ 442,291.20 6,240 6,240 8,320
Computer Support/Operations II $ 29.51 $ 31.19 $ 32.94 34,944 $ 3,272,156.16 34,944 34,944 34,944
Systems Administration $ 37.54 $ 39.68 $ 41.91 17,472 $ 2,081,439.36 17,472 17,472 17,472
TOTAL / VARIANCE $ 7,166,357.12

Sheet3

Position1998 Rate
Proposed
Esc.
1999 Rate
Proposed
Esc.
2000 Rate
Proposed
Esc.
2001 Rate
Applications Systems Analyst II $ 24.05 1.056 $ 25.40 1.057 $ 26.85 1.056 $ 28.35
Programmer Analyst II $ 25.11 1.056 $ 26.51 1.057 $ 28.02 1.056 $ 29.59
Database Analysis II $ 15.87 1.056 $ 16.75 1.057 $ 17.71 1.056 $ 18.70
Computer Support/Operations II $ 27.95 1.056 $ 29.51 1.057 $ 31.19 1.056 $ 32.94
Systems Administration $ 35.55 1.056 $ 37.54 1.057 $ 39.68 1.056 $ 41.91
On-Site Labor Costs

Position 1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Proposed Esc. 2001 Rate
Applications Systems Analyst II $ 24.05 1.056 $ 25.40 1.057 $ 26.85 1.056 $ 28.35
Programmer Analyst II $ 25.11 1.056 $ 26.51 1.057 $ 28.02 1.056 $ 29.59
Database Analysis II $ 15.87 1.056 $ 16.75 1.057 $ 17.71 1.056 $ 18.70
Computer Support/Operations II $ 27.95 1.056 $ 29.51 1.057 $ 31.19 1.056 $ 32.94
Systems Administration $ 35.55 1.056 $ 37.54 1.057 $ 39.68 1.056 $ 41.91

Position 1998 Rate
Proposed
Esc.
1999 Rate
Proposed
Esc.
2000
Rate
Optimistic
Esc.
2001
Rate
Applications Systems Analyst II $ 24.05
Programmer Analyst II $ 25.11
Database Analysis II $ 15.87
Computer Support/Operations II $ 27.95
Systems Administration $ 35.55
On-Site Labor Costs

Position 1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Optimistic Esc. 2001 Rate
Applications Systems Analyst II $ 24.05
Programmer Analyst II $ 25.11
Database Analysis II $ 15.87
Computer Support/Operations II $ 27.95
Systems Administration $ 35.55

Position 1998 Rate
Proposed
Esc.
1999 Rate
Proposed
Esc.
2000
Rate
Optimistic
Esc.
2001
Rate
Applications Systems Analyst II24.05$ 1.056 $ 25.40 1.057 $ 26.85 1.056 $ 28.35
Programmer Analyst II25.11$ 1.056 $ 26.51 1.057 $ 28.02 1.056 $ 29.59
Database Analysis II15.87$ 1.056 $ 16.75 1.057 $ 17.71 1.056 $ 18.70
Computer Support/Operations II27.95$ 1.056 $ 29.51 1.057 $ 31.19 1.056 $ 32.94
Systems Administration35.55$ 1.056 $ 37.54 1.057 $ 39.68 1.056 $ 41.91
On-Site Labor Costs

Position 1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Optimistic Esc. 2001 Rate
Applications Systems Analyst II $ 24.05 1.056 $ 25.40 1.057 $ 26.85 1.056 $ 28.35
Programmer Analyst II $ 25.11 1.056 $ 26.51 1.057 $ 28.02 1.056 $ 29.59
Database Analysis II $ 15.87 1.056 $ 16.75 1.057 $ 17.71 1.056 $ 18.70
Computer Support/Operations II $ 27.95 1.056 $ 29.51 1.057 $ 31.19 1.056 $ 32.94
Systems Administration $ 35.55 1.056 $ 37.54 1.057 $ 39.68 1.056 $ 41.91

Position 1998 Rate
Proposed
Esc.
1999 Rate
Proposed
Esc.
2000
Rate
Optimistic
Esc.
2001
Rate
Applications Systems Analyst II24.05$
Programmer Analyst II25.11$
Database Analysis II15.87$
Computer Support/Operations II27.95$
Systems Administration
On-Site Labor Costs

Position 1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Optimistic Esc. 2001 Rate
Applications Systems Analyst II $ 24.05
Programmer Analyst II $ 25.11
Database Analysis II $ 15.87
Computer Support/Operations II $ 27.95
Systems Administration

Position
Proposed Total
Costs
Optimistic Total
Objective/Target
(Most Likely)
Pessimestic
Total
Applications Systems
Analyst II
670,620.00$
Programmer Analyst II699,961.00$
Database Analysis II442,331.00$
Computer
Support/Operations II
3,272,426.00$
Systems Administration2,081,535.00$
TOTAL7,166,873.00$
On-Site Labor Costs

1999
Basic
2000
Option
1
2001
Option
2
1999
Basic
Delta
2000
Option1
Delta
2001
Option2
Delta
1999
Basic
Delta
2000
Option
1
Delta
2001
Option
2
Delta
1999
Basic
Delta
2000
Option
1
Delta
2001
Option
2
Delta
Applics Sys
Anal II
720840960360360480
Progr Analyst
II
8409601080240240360
Database
Anal/Prog II
720840960240240360
PESSIMISTICPROPOSEDOPTIMISTIC
Position
OBJECTIVE/TARGET
On-Call Labor

Position PROPOSED OPTIMISTIC OBJECTIVE/TARGET PESSIMISTIC
1999 Basic 2000 Option1 2001 Option2 1999 Basic Delta 2000 Option1 Delta 2001 Option2 Delta 1999 Basic Delta 2000 Option1 Delta 2001 Option2 Delta 1999 Basic Delta 2000 Option1 Delta 2001 Option2 Delta
Applics Sys Anal II 720 840 960 360 360 480
Progr Analyst II 840 960 1080 240 240 360
Database Anal/Prog II 720 840 960 240 240 360

1999
Rate
2000
Rate
2001
Rate
1999
Rate
2000
Rate
2001
Rate
1999
Rate
2000
Rate
2001
Rate
Applics Sys
Anal II
Progr Analyst
II
Database
Anal/Prog II
Position
OPTOMISTICPESSIMISTIC OBJECTIVE/ TARGET
On-Call Labor

Position OPTOMISTIC OBJECTIVE/ TARGET (MOST LIKELY) PESSIMISTIC
1999 Basic 1999 Rate Total 2000 Option1 2000 Rate Total 2001 Option2 2001 Rate Total 1999 Basic Delta 1999 Rate Total 2000 Option1 Delta 2000 Rate Total 2001 Option2 Delta 2001 Rate Total 1999 Option1 Delta 1999 Rate Total 2000 Option1 Delta 2000 Rate Total 2001 Option2 Delta 2001 Rate Total
Applics Sys Anal II 720 $ – 0 360 50% $ – 0
Progr Analyst II 840 $ – 0 240 71% $ – 0
Database Anal/Prog II 720 $ – 0 240 67% $ – 0

1999 Total2000 Total2001 Total1999 Total2000 Total2001 Total1999 Total2000 Total2001 Total
Applics Sys Anal II
Progr Analyst II
Database Anal/Prog II
Yearly Totals
3 Year Totals
Position
OPTIMISTICPESSIMISTICOBJECTIVE/TARGET (MOST LIKELY)
On-Call Labor

Position OPTIMISTIC OBJECTIVE/TARGET (MOST LIKELY) PESSIMISTIC
1999 Basic 1999 Rate 1999 Total 2000 Option1 2000 Rate 2000 Total 2001 Option2 2001 Rate 2001 Total 1999 Basic Delta 1999 Rate 1999 Total 2000 Option1 Delta 2000 Rate 2000 Total 2001 Option2 Delta 2001 Rate 2001 Total 1999 Option1 Delta 1999 Rate 1999 Total 2000 Option1 Delta 2000 Rate 2000 Total 2001 Option2 Delta 2001 Rate 2001 Total
Applics Sys Anal II 720 $ 38.10
Progr Analyst II 840 $ 39.77
Database Anal/Prog II 720 $ 25.13
Yearly Totals
3 Year Totals

Position
Proposed On-
Site Hrs./Yr.
Optimistic
Hrs/Yr.
Objective/
Target (Most
Likely) Hrs/Yr.
Pessimistic
Applications Systems Analyst II8,320
Programmer Analyst II8,320
Database Analysis II8,320
Computer Support/Operations II34,944
Systems Administration17,472
Total Hours77,376
3 Year Total232,128
Fringe Rate1.47$
Total Fringe113,742.72$
3 Year Total341,228.16$
Total Hours

Position Proposed On-Site Hrs./Yr. Optimistic Hrs/Yr. Objective/ Target (Most Likely) Hrs/Yr. Pessimistic
Applications Systems Analyst II 8,320
Programmer Analyst II 8,320
Database Analysis II 8,320
Computer Support/Operations II 34,944
Systems Administration 17,472
Total Hours 77,376
3 Year Total 232,128
Fringe Rate $ 1.47
Total Fringe $ 113,742.72
3 Year Total $ 341,228.16

1999
Optimistic
Total
2000
Optimistic
Total
2001
Optimistic
Total
Optimistic
Total
1999
Target/Obje
ctive (Most
Likely)
2000
Target/Obje
ctive (Most
Likely)
2001
Target/Object
ive (Most
Likely)
Objective/Tar
get (Most
Likely) Total
1999
Pessimistic
Total
2000
Pessimistic
Total
2001
Pessimistic
Total
Pessimistic
Total
Total Labor Cost 2,218,164$ 2,344,599$ 2,489,693$
OVERHEAD35%47%47%
OVERHEAD TOTALS766,105$ 1,087,409$ 1,148,304$
On-Site Labor Costs

1998 Rate Proposed Esc. 1999 Rate Proposed Esc. 2000 Rate Proposed Esc. 2001 Rate Optimistic Esc. 1999 Rate Optimistic Esc. 2000 Rate Optimistic Esc. 2001 Rate Proposed Hrs./Yr. Optimistic Hrs/Yr. 1999 Optimistic Total 2000 Optimistic Total 2001 Optimistic Total Optimistic Total 1999 Target/Objective (Most Likely) 2000 Target/Objective (Most Likely) 2001 Target/Objective (Most Likely) Check Objective/Target (Most Likely) Total Objective Hrs/Yr. 1999 Pessimistic Total 2000 Pessimistic Total 2001 Pessimistic Total Proposed Optimisti Costs Pessimistic Total Pessimestic Hrs/Yr. 1999 Pessimesitc Total 2000 Pessimesitc Total 2001 Pessimesitc Total Check Total Pessimestic Total Costs Pessimistic Total
Total Labor Cost $ 2,218,164 $ 2,344,599 $ 2,489,693 $ – 0 0% 0% $ – 0 $ – 0 $ – 0 $ – 0 $ – 0 $ – 0
OVERHEAD 35% 47% 47% 35% 50% 50%
OVERHEAD TOTALS $ 766,105 $ 1,087,409 $ 1,148,304 $ – 0 $ – 0 $ – 0 $ – 0

Overhead

Cost Description
Optimistic
Shared Ratio
1999
Optimistic
2000
Optimistic
2001
Optimistic
Most Likely
Shared Ratio
1999
Target/Objecti
ve ( Most
Likely )
2000
Target/Objecti
ve ( Most
Likely )
2001Target/Ob
jective ( Most
Likely )
Pessimistic
Shared Ratio
1999
Pessimistic
2000
Pessimistic
2001
Pessimistic
Target Costs3,962,376$ 4,822,253$ 5,036,313$
Target Fee9%356,614$ 434,003$ 453,268$
Optimist Costs84%3,328,396$ 4,050,693$ 4,230,503$
Pessimistic Costs115%4,556,732$ 5,545,591$ 5,791,760$
Optimistic Fee (Po)20%483,410$ 588,315$ 614,430$
Pessimistic Fee20%237,743$ 289,335$ 302,179$
Fees & Ratio’s

Cost Description Optimistic Shared Ratio 1999 Optimistic 2000 Optimistic 2001 Optimistic Most Likely Shared Ratio 1999 Target/Objective ( Most Likely ) 2000 Target/Objective ( Most Likely ) 2001Target/Objective ( Most Likely ) Pessimistic Shared Ratio 1999 Pessimistic 2000 Pessimistic 2001 Pessimistic
Target Costs $ 3,962,376 $ 4,822,253 $ 5,036,313
Target Fee 9% $ 356,614 $ 434,003 $ 453,268
Optimist Costs 84% $ 3,328,396 $ 4,050,693 $ 4,230,503
Pessimistic Costs 115% $ 4,556,732 $ 5,545,591 $ 5,791,760
Optimistic Fee (Po) 20% $ 483,410 $ 588,315 $ 614,430
Pessimistic Fee 20% $ 237,743 $ 289,335 $ 302,179

PROPOSEDTARGET/OBJECTIVEOPTIMISTIC PESSIMISTIC
P
A
= S
CU
(C
T
-C
F
)$210,000
S
CU
Contractors Under Ratio 30%20%
C
T
Target cost15,212,720$ 13,820,342$
C
F
Final Cost14,512,720$ 13,120,342$
P
F
= P
A
+ P
T
$1,883,399
P
T
Target Fee1,673,399$ 1,243,885$
MaxMaximum Fee2,403,610$ 1,686,155$
K
F
C
F +PF
$16,396,119
Contract Total
C
F +Max
$16,916,330
Formula’s
On-Site Labor Hours

Final Cost

Formula’s PROPOSED TARGET/OBJECTIVE OPTIMISTIC PESSIMISTIC
PA = SCU(CT-CF) $210,000
SCU Contractors Under Ratio 30% 20%
CT Target cost $ 15,212,720 $ 13,820,342
CF Final Cost $ 14,512,720 $ 13,120,342
PF = PA + PT $1,883,399
PT Target Fee $ 1,673,399 $ 1,243,885
Max Maximum Fee $ 2,403,610 $ 1,686,155
KF CF +PF $16,396,119
Contract Total CF +Max $16,916,330

Cost Description
PROPOSED
TOTALS
OPTIMISTIC
OBJECTIVE/
TARGET
REF.
PESSIMISTIC
Target Cost15,212,720$ 13,820,942$
Target Fee1,673,399$ 1,243,885$
Target Price16,886,119$ 15,064,827$
Minimum Fee 1,521,272$ 829,257$
Maximum Fee 2,403,610$ 1,686,155$
Optimistic Cost12,778,685$ 11,609,591$
Pessimistic Cost 16,733,992$ 15,894,084$
Contractor Share Ratio Over10%20%
On-Site Labor Hours

On-Site Labor Costs

On-Call Labor

Position PROPOSED OPTIMISTIC OBJECTIVE MOST LIKELY TO NEGOTIATE
1999 Basic 1999 Rate 1999 Total 2000 Option1 2000 Rate 2000 Total 2001 Option2 2001 Rate 2001 Total 1999 Basic Delta 1999 Rate 1999 Total 2000 Option1 Delta 2000 Rate 2000 Total 2001 Option2 Delta 2001 Rate 2001 Total 1999 Option1 Delta 1999 Rate 1999 Total 2000 Option1 Delta 2000 Rate 2000 Total 2001 Option2 Delta 2001 Rate 2001 Total
Applics Sys Anal II 720 $ 38.10 $ 27,432.00 840 $ 40.27 $ 33,826.80 960 $ 42.53 $ 40,828.80 360 50% $ 37.91 $ 13,649.34 360 57% $ 39.89 $ 14,359.10 480 50% $ 41.92 $ 20,121.89 720 0% $ 38.10 $ 27,432.00 720 14% $ 40.27 $ 28,994.40 720 25% $ 42.53 $ 30,621.60
Progr Analyst II 840 $ 39.77 $ 33,406.80 960 $ 42.04 $ 40,358.40 1080 $ 44.39 $ 47,941.20 240 71% $ 39.59 $ 9,500.62 240 75% $ 41.64 $ 9,994.65 360 67% $ 43.77 $ 15,756.57 840 0% $ 39.77 $ 33,406.80 840 13% $ 42.04 $ 35,313.60 840 22% $ 44.39 $ 37,287.60
Database Anal/Prog II 720 $ 25.13 $ 18,093.60 840 $ 26.56 $ 22,310.40 960 $ 28.05 $ 26,928.00 240 67% $ 25.02 $ 6,004.57 240 71% $ 26.32 $ 6,316.81 360 63% $ 27.66 $ 9,958.45 720 0% $ 25.13 $ 18,093.60 720 14% $ 26.56 $ 19,123.20 720 25% $ 28.05 $ 20,196.00
Yearly Totals $ 78,932.40 $ 96,495.60 $ 115,698.00 $ 29,154.53 $ 30,670.57 $ 45,836.91 $ 78,932.40 $ 83,431.20 $ 88,105.20
3 Year Totals $ 291,126.00 $ 105,662.01 $ 250,468.80

Total Hours

Position Proposed On-Site Hrs./Yr. Optimistic Hrs/Yr. Most Likely Hrs/Yr.
Applications Systems Analyst II 8,320 6,240 8,320
Programmer Analyst II 8,320 6,240 8,320
Database Analysis II 8,320 6,240 6,240
Computer Support/Operations II 34,944 34,944 34,944
Systems Administration 17,472 17,472 17,472
Total Hours 77,376 71,136 75,296
3 Year Total 232,128 213,408 225,888
Fringe Rate $ 1.47 $ 1.47 $ 1.47
Total Fringe $ 113,742.72 $ 104,569.92 $ 110,685.12
3 Year Total $ 341,228.16 $ 313,709.76 $ 332,055.36

Material

Material 1999 Proposed Costs 2000 Proposed Costs 2001 Proposed Costs Proposed Total 1999 Esc. 2000 Esc. 2001 Esc. 1999 Opt. Rate 1999 Optimistic Target 2000 Opt. Rate 2000 Optimistic Target 2001 Opt. Rate 2001 Optimistic Target Optimistic Total 1999 MLN Rate 1999 Most Likely to Negotiate (MLN) 2000 MLN Rate 2000 Most Likely to Negotiate (MLN) 2001 MLN Rate 2001 Most Likely to Negotiate (MLN) Most Likely to Negotiate Total
Scheduled $200,000 $225,816 $204,514 $630,330 0.930 0.941 0.930 0.930 $200,000.00 0.941 $225,816.00 0.930 $204,514.00 $630,330.00 0.930 $200,000.00 0.941 $225,816.00 0.930 $204,514.00 $630,330.00
Unscheduled $151,320 $190,815 $245,082 $587,217 1.261 1.261 1.284 1.000 $120,000.00 1.050 $158,886.40 1.100 $209,961.21 $488,847.61 1.150 $138,000.00 1.150 $174,018.44 1.150 $219,504.91 $531,523.34
Minor enhancements $40,740 $55,325 $76,525 $172,590 1.358 1.358 1.383 1.000 $30,000.00 1.000 $40,740.06 0.250 $13,833.15 $84,573.21 1.200 $36,000.00 1.200 $48,888.07 0.575 $31,816.25 $116,704.32
Miscellaneous $8,536 $9,108 $9,898 $27,542 1.067 1.067 1.087 1.050 $8,400.00 1.050 $8,962.89 1.050 $9,561.09 $26,923.97 1.050 $8,400.00 1.050 $8,962.89 1.050 $9,561.09 $26,923.97
TOTAL MATERIAL $400,596 $481,064 $536,019 $1,417,679 $358,400.00 $434,405.35 $437,869.45 $1,230,674.80 $382,400.00 $457,685.40 $465,396.24 $1,305,481.64

Fees & Ratio’s

Cost Description Proposed Shared Ratio 1999 Proposed 2000 Proposed 2001 Proposed Optimistic Shared Ratio 1999 Optimistic 2000 Optimistic 2001 Optimistic Most Likely Shared Ratio 1999 Most Likely to Negotiate 2000 Most Likely to Negotiate 2001 Most Likely to Negotiate
Target Costs $ 4,188,692.00 $ 5,340,333.40 $ 5,409,027.15 $ 3,835,174.77 $ 4,706,123.20 $ 4,916,586.42 $ 4,109,815.57 $ 5,051,150.92 $ 5,304,754.35
Target Fee 11% $ 460,756.12 $ 587,436.67 $ 594,992.99 9% $ 345,165.73 $ 423,551.09 $ 442,492.78 9% $ 369,883.40 $ 454,603.58 $ 477,427.89
Optimist Costs 84% $ 3,518,501.28 $ 4,485,880.06 $ 4,543,582.81 84% $ 3,221,546.80 $ 3,953,143.49 $ 4,129,932.59 84% $ 3,452,245.08 $ 4,242,966.77 $ 4,455,993.65
Pessimistic Costs 110% $ 4,607,561.20 $ 5,874,366.74 $ 5,949,929.87 115% $ 4,410,450.98 $ 5,412,041.68 $ 5,654,074.38 115% $ 4,726,287.91 $ 5,808,823.55 $ 6,100,467.50
Optimistic Fee (Po) 30% $ 661,813.34 $ 843,772.68 $ 854,626.29 30% $ 529,254.12 $ 649,445.00 $ 678,488.93 30% $ 567,154.55 $ 697,058.83 $ 732,056.10
Pessimistic Fee 10% $ 418,869.20 $ 534,033.34 $ 540,902.72 20% $ 230,110.49 $ 282,367.39 $ 294,995.18 20% $ 246,588.93 $ 303,069.05 $ 318,285.26

1999 Costs

On-Site Support Proposed Hrs./Yr. Esc. 1999 Rate 1999 Proposed Total PROPOSED TOTALS Optimistic Hrs/Yr. Esc. 1999 Rate 1999 Optimistic Total OPTIMISTIC TOTALS Most Likely to Negotiate Hrs/Yr. Esc. 1999 Rate 1999 Most Likely Total MOST LIKELY TO NEGOTIATE TOTALS
Application Systems Analyst II 8,320 1.056 $ 25.40 $ 211,339.00 6,240 1.051 $ 25.28 $ 157,725.67 8,320 1.056 $ 25.40 $ 211,328.00
Programmer Analyst II 8,320 1.056 $ 26.51 $ 220,586.00 6,240 1.051 $ 26.39 $ 164,677.41 8,320 1.056 $ 26.51 $ 220,563.20
Database Analyst II 8,320 1.056 $ 16.75 $ 139,396.00 6,240 1.051 $ 16.68 $ 104,079.27 6,240 1.056 $ 16.75 $ 104,520.00
Computer Support/Operations II 34,944 1.056 $ 29.51 $ 1,031,273.00 34,944 1.051 $ 29.38 $ 1,026,495.72 34,944 1.056 $ 29.51 $ 1,031,197.44
Systems Administration 17,472 1.056 $ 37.54 $ 655,975.00 17,472 1.051 $ 37.36 $ 652,807.21 17,472 1.056 $ 37.54 $ 655,898.88
On-Call Support
Application Systems Analyst II 720 $ 38.10 $ 27,433.00 360 $ 37.91 $ 13,649.34 720 $ 38.10 $ 27,432.00
Programmer Analyst II 840 $ 39.77 $ 33,406.00 240 $ 39.59 $ 9,500.62 840 $ 39.77 $ 33,406.80
Database Analyst II 720 $ 25.13 $ 18,095.00 240 $ 25.02 $ 6,004.57 720 $ 25.13 $ 18,093.60
Total Labor 79,656 $ 2,337,503.00 71,976 $ 2,134,939.81 77,576 $ 2,302,439.92
Fringe $ 1.47 $ 113,742.72 $ 1.47 $ 104,569.92 $ 1.47 $ 110,685.12
Overhead 35% $ 790,499.15 35% $ 737,024.85 35% $ 778,227.63

Material Growth Factors
Scheduled $200,000 $200,000.00 $200,000.00
Unscheduled 1.261 $151,320 1.000 $120,000.00 1.150 $138,000.00
Minor Enhancements 1.358 $40,740 1.000 $30,000.00 1.200 $36,000.00
Misc 1.067 $8,536 1.050 $8,400.00 1.050 $8,400.00
Total Material $400,596 $358,400 $382,400
Total Support Cost $ 3,642,340.87 $ 3,334,934.58 $ 3,573,752.67

G&A 15% $ 546,351.13 15% $ 500,240.19 15% $ 536,062.90

Target Cost $ 4,188,692.00 $ 3,835,174.77 $ 4,109,815.57
Target Fee 11% $ 460,756.12 9% $ 345,165.73 9% $ 369,883.40
Target Price $ 4,649,448.12 $ 4,180,340.50 $ 4,479,698.97
Minimum Fee 90/10 $ 418,869.20 80/20 $ 230,110.49 90/10 $ 246,588.93
Maximum Fee 70/30 $ 661,813.34 80/20 $ 529,254.12 70/30 $ 567,154.55
Optimistic Cost 84% $ 3,518,501.28 84% $ 3,221,546.80 84% $ 3,452,245.08
Pessimistic Cost 110% $ 4,607,561.20 115% $ 4,410,450.98 115% $ 4,726,287.91
Contractor Share Ratio Over 10% 20% 20%
Contractor Share Ratio Under 30% 30% 30%

Summary

Cost Description PROPOSED TOTALS 1999 OPTIMISTIC TOTALS 2000 OPTIMISTIC TOTALS 2001 OPTIMISTIC TOTALS OPTIMISTIC 1999 MOST LIKELY TO NEGOTIATE TOTALS 2000 MOST LIKELY TO NEGOTIATE TOTALS 2001 MOST LIKELY TO NEGOTIATE TOTALS OBJECTIVE/ TARGET REF. PESSIMISTIC
Target Cost $ 15,212,720 $ 4,188,692.00 $ 4,706,123.20 $ 4,916,586.42 $ 4,109,815.57 $ 5,051,150.92 $ 5,304,754.35 $ 13,820,942
Target Fee $ 1,673,399 $ 460,756.12 $ 423,551.09 $ 442,492.78 $ 369,883.40 $ 454,603.58 $ 477,427.89 $ 1,243,885
Target Price $ 16,886,119 $ 4,649,448.12 $ 5,129,674.29 $ 5,359,079.19 $ 4,479,698.97 $ 5,505,754.50 $ 5,782,182.24 $ 15,064,827
Minimum Fee $ 1,521,272 $ 418,869.20 $ 282,367.39 $ 294,995.18 $ 246,588.93 $ 303,069.05 $ 318,285.26 $ 829,257
Maximum Fee $ 2,403,610 $ 661,813.34 $ 649,445.00 $ 678,488.93 $ 567,154.55 $ 697,058.83 $ 732,056.10 $ 1,686,155
Optimistic Cost $ 12,778,685 $ 3,518,501.28 $ 3,953,143.49 $ 4,129,932.59 $ 3,452,245.08 $ 4,242,966.77 $ 4,455,993.65 $ 11,609,591
Pessimistic Cost $ 16,733,992 $ 4,607,561.20 $ 5,412,041.68 $ 5,654,074.38 $ 4,726,287.91 $ 5,808,823.55 $ 6,100,467.50 $ 15,894,084
Contractor Share Ratio Over 10% 20%
Contractor Share Ratio Under 30% 20%

On-Site Support
Proposed
Hrs./Yr.
1999
Rate
1999
Proposed
Total
Proposed
Totals
Optimistic
Hrs/Yr.
1999
Rate
1999
Optimistic
Total
OPTIMISTIC
TOTALS
OBJ
1999
Rate
1999 Obj
Total
OBJECTIVE
Target
TOTALS
Pessimistic
Application Systems Analyst II
8,3201.056 $ 25.40 211,339$ 8,3201.056 $25.40 $ 211,339 $
Programmer Analyst II
8,3201.056 $ 26.51 220,586$ 8,3201.056 $ 26.51 $ 220,586 $
Database Analyst II
8,3201.056 $ 16.75 139,396$ 4,1601.056 $ 16.75 $ 69,698 $
Computer Support/Operations II
34,9441.056 $ 29.51 1,031,273$ 34,9441.056 $ 29.51 $ 1,031,273 $
Systems Administration
17,4721.056 $ 37.54 655,975$ 17,4721.056 $37.54 $ 655,975 $
On-Call Support
$
Application Systems Analyst II
720 $ 38.10 27,433$ 360 $ 38.10 $ 13,717 $
Programmer Analyst II
840 $ 39.77 33,406$ 240 $39.77 $ 9,545 $
Database Analyst II
720 $ 25.13 18,095$ 240 $ 25.13 $ 6,032 $
Total Labor
79,6562,337,503$ 74,0562,218,164$
$
Fringe
$ 1.47
113,743$
$ 1.47
107,628$
$
Overhead
35%
790,499$
35%
766,105$
$
$
Material Growth Factors
$
Scheduled$200,000200,000$
$
Unscheduled1.261$151,3200.970116,400$
$
Minor Enhancements1.358$40,7400.97029,100$
$
Misc1.067$8,5361.0198,148$
$
Total Material$400,596353,648$
$
Total Support Cost3,642,341$ 3,445,545$
$
$
G&A15%546,351$ 15%516,832$
$
$
Target Cost4,188,692$ 3,962,376$
$
Target Fee11%460,756$ 9%356,614$
$
Target Price4,649,448$ 4,318,990$
$
Minimum Fee 90/10418,869$ 80/20237,743$
$
Maximum Fee 70/30661,813$ 80/20183,410$
$
Optimistic Cost84%3,518,501$ 84%483,410$
$
Pessimistic Cost 110%4,607,561$ 115%3,328,396$
$
Contractor Share Ratio Over10%20%%
Contractor Share Ratio Under30%20%%

Handout

(Version 4)
INTERMEDIATE CONTRACT PRICING (CON

Services Scenario Cover Sheet

This case scenario covers the following course objectives:

Terminal Learning

Objective

4. Given a services scenario, applicable references, mathematical techniques, and resources, formulate cost or pricing positions for a pre-price negotiatiation memorandum (pre-PNM) that supports a fair and reasonable price decision.

Enabling Learning Objective 1: Identify Cost Plus Incentive Fee (CPIF) elements.

Enabling Learning Objective 2: Calculate incentive factors such as share ratios, range of incentive effectiveness, target cost, fee limits, and final contract price.

Enabling Learning Objective 3: Recognize issues and factors to consider in making equitable adjustments.

Enabling Learning Objective 4: Given a statement of work change, determine the contract price adjustment.

Introduction: You are a contract specialist in the services branch of a contracting office. You are responsible for contracting various services supporting two regionally located bases, to include services in support of the two base computer centers. You will conduct the cost/price analysis supporting the award of a follow-on regional computer center support contract. Your director of contracting has requested that you provide your pre-PNM presentation tomorrow afternoon instead of next week. You will provide a copy of your pre-PNM and any presentation material.

Information Gathering: You already have the proposal, technical review, and DCAA input. Time to finish the cost/price analysis, the pre-negotiation memo, and presentation material. If you need additional information, ask the instructor. State the person you are asking the question of (contractor, auditor, etc.) and the exact question.

Grading: Individuals will be graded on pre-PNM memo content, and presentation findings.

CON204 –

Services Case

Regional Computer Centers Support Contract

BACKGROUND: You are a contract specialist in the services branch of a contracting office responsible for supporting two regionally located military bases. The workload of the services branch continues to increase as more and more base/post/station support services are contracted out. You are responsible for not only awarding all new service contracts (obtained primarily competitively), but also for all changes/modifications to those contracts. Recently you have been working a sole source follow-on contract which will provide support for the two local base computer centers. A competitive follow-on is already being planned for award in late

2001

which will require support of the new DoD standard base computer support system.

The base computer centers have

–

year old computer systems supporting their respective base operations. Four years ago, McGhee Systems won the regional computer support contract (Cost Plus Fixed Fee). Performance under the last option will be completed in two months. You issued a synopsis in the Commerce Business Daily announcing that an RFP would be issued for the FINAL three years of support, maintenance and enhancements of the existing computer systems (basic plus two one year options). Only one response was received; it was from the incumbent, McGhee Systems. You were aware, based on market research and input from both base computer systems centers, that many computer support companies no longer support these old computer systems. There is better opportunity to make more money supporting new systems and there are very few people these days with the skills needed to maintain the old systems.

Contractor support has been satisfactory. They are responsive and overall system downtime at both bases has been less than two percent over the past year. However, Government technical personnel complain that the contractor seem’s over-staffed and doesn’t seem to be taking opportunities to control costs. You discuss with the Government team how a CPIF contract can be used to motivate contractor cost control and efficiency. Everyone agrees that the time is right to switch to a CPIF contract. The RFP requires that the contractor 1) Provide a full spectrum of computer analyst services with ON-SITE support Monday – Friday (0800-1700) and ON-CALL analyst services for off-duty hours; 2) 24 x 7 on-site system administration and computer support/operators; and

3) Support attainment of a less than 2% overall system downtime performance goal.

Again, it is time to finish your cost/price analysis, the pre-negotiation memo, and the presentation. If more information is needed, ask the instructor. State the person you are asking the question of (contractor, auditor, etc) and exactly what you want. Your contracting organization is responsible for contract administration.

Attachment 1

Proposal

From: McGhee Computer Systems

Subject: Proposal in for Support of Regional Base Computer Centers

To: McChord AFB/Contracting Officer

We appreciate the opportunity to submit this proposal for continuing our regional support of computer center operations at both Fogleman Air Force Base and Ryan Air Force Base. We recognize the challenge of supporting the maintenance/operation of the various aging systems and are fully committed to continuation of the less than 2% experienced downtime of the systems.

We believe our proposal is fully responsive to the RFP. Supporting detail for the following is provided on the attached spreadsheet. Estimates and calculations to include rates, factors, and hours, are documented in the electronic proposal spreadsheet submitted in response to your RFP request to maximize use of paperless, electronic media to submit proposals. We have submitted an electronic copy of the proposal by email (encoded) to you and the DCAA for their review.

1. Labor.

The labor categories and hours proposed are based on the current labor types, mix, and hours used on the current CPFF contract supporting both base computer centers. The RFP requires that we:

1) Provide a full spectrum of computer analyst services with on-site support Monday – Friday (0800-1700) and on-call analyst services for off-duty hours, and

2) 24 x 7 on-site system administration and computer support/operators.

3) Support attainment of a less than 2% overall system downtime performance goal.

Labor rates are based on actual rates escalated per DRI escalation for automated data processing personnel plus .

. Additional escalation is based on our experience with attracting and retaining qualified computer professionals to work on these aging computer systems. All rates except the

Systems Administrator

are subject to the Services Contract Act Department of Labor Wage Determinations. All rates exceed DOL minimum rates. It is an extremely competitive labor market.

A. Labor.

On-Site Support

. See attached spreadsheet.

– Applications Systems Analyst II (

1999

2000

, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

– Programmer Analyst II (1999, 2000, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

– Database Analyst II (1999, 2000, 2001)

2080hrs/yr x 2 persons x 2 sites = 8320 hrs.

– Computer Support/Operations II (1999, 2000, 2001)

(2080hrs/yr + (16hrs x 52wks)) x 2 persons x 2 sites x 3 shifts=

34,944

hrs.

– Systems Administration (1999, 2000, 2001)

(2080hrs/yr + (16 hrs x 52 wks)) x 1 person x 2 sites x 3 shifts=

17,472

hrs/yr

Note: 2080 hrs/yr based on

hours per week x 52 weeks

Technical Input:

The labor for on-site support is “business as usual;” the same labor types and quantities used to perform under the current contract. The approach treats the on-site labor as a fixed cost to provide minimum on-site support. Our requirement is to have on-site support, not specifically that we have two of each analyst. We have discussed with the contractor the idea of better using the analysts, perhaps by cutting back to one on-site for each analyst labor category and having one floating back and forth as needed. However, given the ongoing disagreement on anticipated stable or increasing breakdowns/failures (see discussion under on-call support), we do not believe this issue should be forced at the negotiations. The best approach will be to ensure best use of the incentive type contract proposed by the contracting office. We need to strongly encourage and motivate the contractor to continue excellent support coverage AND to control costs.

We take no exception to the contractor’s contention that it is hard to find and retain personnel with the skills required to support these systems.

We recommend that the Government objective be based on use of the proposed labor except for database analysts. We are certain that the workload for database analyst support has decreased significantly. We haven’t created any new significant databases in three years and the current database structures and uses are very stable.

Auditor: DCAA verified 1998 labor categories/rates currently used/paid under existing contract. DCAA recommends escalation at DRI/ADP.

Thoughts and Comments from the Instructor:

2. What sources could you go to conduct this market research on the labor market?

3. DCAA recommended use of DRI escalation. The contractor proposes using DRI plus .5% due to the tight labor market. What would you do to resolve the DCAA recommendation and the proposed addition of .5% escalation?

B. Labor. On-Call Support. See attached spreadsheet.

On-call labor is proposed as overtime for analysts employed Monday – Friday (0800-1700). Estimated per month on-call hours are based on an expected significant increase in computer system breakdowns due to the continued aging of the computer systems.

Proposed

labor rates are based on an overtime premium factor of 1.5 (industry standard) applied to the base wage rates.

Example of hours and rate calculations.

HOURS – Applications Systems Analyst II hours (1999) = 12 months x two sites x

hrs/month =

720

hours per year

OVERTIME RATE – Applications Systems Analyst II rate (1999) = 1999 base rate x 1.5 overtime factor =

$38.10

Proposed/Est’d ON-CALL HOURS/Month

1999 2000 2001

Basic

Option1

Option2

Applics Sys Anal II

Progr Analyst II

Database Anal/Prog II

Technical Input:
In contrast to the on-site labor, on-call labor is the variable part of the total labor required to support the computer centers. Whereas the on-site personnel are “at work” whether or not a computer system has failed, the on-call labor is used only if someone needs to be called in to get a system running again. Government technical personnel at the computer centers disagree with the contractor regarding the likelihood that the aging computer systems at each base will breakdown/fail significantly more over the next three years. The technical folks contend that past enhancements have solved most of the problems that have caused past, recurring breakdowns. Your technical personnel expect continuation of the current breakdown/failure rates. They recommend the following estimate of on-call overtime hours be used for developing the Government estimate.

Objective/Est’d ON-CALL HOURS/Month

1999

2000

2001

Basic Option1 Option2 Applics Sys Anal II 15

20 Progr Analyst II 10

15
Database Anal/Prog II

Auditor: DCAA verified 1998 labor categories/rates, and overtime factor currently used/paid under existing contract. DCAA recommends escalation at DRI/ADP.

Thoughts and Comments from the Instructor:

1. What quantitative analysis methods could you suggest to better assess whether there will be an increasing occurrence of failures?

3. In what ways could we use DCAA support for our analysis? What are examples of specific requests for this information? What is an example of a request that would be too general? [DCAA verified labor rates of current employees supporting the current contract, escalation, and the overtime factor used. They could have provided input on labor turnover.

4. Why does introducing incentives on cost performance make sense in this situation?

5. What are the possibilities if we stated the requirement only in terms of the 2% downtime goal? Would the contractor have more freedom in how support was accomplished?

6. Would performance incentives be more or less motivating if requirements were restated this way? How could award fee be used? FPIF?

7. Discuss the possibility of endangering performance by overemphasizing cost control through incentives.

Fringe

. Proposed rate of

$1.47

per labor hour (excluding overtime hours) exceeds Department of Labor minimum for this labor area.

Auditor:

DCAA reviewed the proposed per labor hour fringe cost and took no exception.

Thoughts and Comments from the Instructor:

1. What costs are typically included in fringe?

2. What is one reason that fringe would specifically be identified in the proposal, as opposed to just being included as part of the overhead?

3. Where could you find out what the Dept of Labor minimum wages and fringe are for in your area?

4. Discuss why contracting officer involvement in fringe issues differs significantly based on whether contract administration has been delegated to DCMC or not.

5. Where could you go in the Deskbook to get information on fringe costs? Allowability policy? Calculating an indirect cost? DCAA guidance?

6. What are the implications of whether this contract is CAS covered or not?

7. If the company experienced a significant decline in its business base and workforce, how might this impact its cost of fringe benefits per labor hour?

Overhead

. Proposed overhead rates based on inclusion of allowable costs in indirect pools consistent with FAR Cost Accounting Standards and Cost Principles. McGhee Systems anticipates a substantial reduction in its business base in 2000 and 2001. Many companies have switched to new computer systems which we do not support. The significant loss of business is reflected in the increased overhead rates for 2000 and 2001.

1999

35%

2000

2001

50%

Note: Base is labor dollars less overtime labor dollars.

Auditor:
DCAA reviewed the proposed overhead rates and takes exception to

of the proposed overhead rates proposed for 2000 and 2001. DCAA used McGhee System’s weighted average (rather than the proposed simple average) of the range of potential business sales estimates.

Thoughts and Comments from the Instructor:

1. What costs are typically included in overhead?

2. Discuss common indirect cost rate misunderstanding; i.e., assessing a rate as too high or too low without understanding the composition and costs included in its pool and base.

3. Discuss why contracting officer involvement in indirect cost issues differs significantly based on whether contract administration has been delegated to DCMC or not.

4. Where could you go in the Deskbook to get information on indirect costs? Allowability policy? Calculating an indirect cost? DCAA guidance?

5. What are the implications of whether this contract is CAS covered or not?

6. If a company is doing business predominantly with Government and its Government business is declining, what would likely happen to its overhead rate?

Material

/Parts.

– For Scheduled Maintenance. Types and quantities derived from specific maintenance tasks/standards identified in system maintenance manuals. Costs for 1999 based on current quotes or catalog prices (reflecting standard negotiation decrements and expected discounts). Costs for 2000 and 2001 based on DRI indices (electronic components) application to materials/parts required for planned maintenance.

– For

Unscheduled

Maintenance/Repair. Estimate based on 1998 actuals (types and quantities of material used) and expected

30%

increase in breakdowns based on age of systems.

– For Minor System Enhancements. Estimate based on 1998 actuals (types and quantities) and expected 40% growth due to increase in required minor enhancements.

–

Miscellaneous

Material/Parts. Based on 1998 actuals and expected

10%

annual growth in required miscellaneous materials.

Note: Estimated cost of unscheduled, minor enhancement, and miscellaneous materials/parts based on using DRI indices for electronic components.

1999

2000

2001

1.30

1.40

1.10

Material Growth Factors – Proposed
	Unscheduled	1.30
	Minor Enhancements	1.40
	Miscellaneous		1.10

Technical Input:
The proposed materials for scheduled maintenance on the various computer systems match the suggested materials required for maintenance identified in the respective technical manuals. All other proposed material is based on use of a materials growth factor. McGhee Systems estimates that material requirements will significantly increase for unscheduled maintenance and minor system enhancements. Again, we disagree with McGhee Systems that there will be a significant increase in the occurrence of system breakdowns/failures. We believe that past enhancements have stablized the requirement for unexpected maintenance.

The following summarizes the proposed and recommended growth factors for materials supporting unscheduled maintenance, minor system enhancements, and miscellaneous use:

Material Growth Factors – Proposed

1999

2000

2001

Unscheduled

1.30

Minor Enhancements

1.40

Miscellaneous

1.10

1999

2000

2001

Unscheduled

1.10

Minor Enhancements

1.00

Miscellaneous

1.05

Material Growth Factors – Govt Objective

1.00

1.05

0.25

Auditor:
McGhee Systems proposed escalation of material costs using DRI escalation for electronic components. DCAA takes no exception to the proposed escalation.

DRI

Esc

alation/ADP

-3.00%

-1.

20%

G&A

15%

/1999;

25%

/2000; 25%/2001. Base is total cost.

Auditor:
DCAA reviewed the proposed overhead rates and takes exception to 2% of the proposed overhead rates proposed for 2000 and 2001. DCAA used McGhee System’s weighted average (rather than the proposed simple average) of the range of potential business sales estimates.

Thoughts and Comments from the Instructor:

1. What costs are typically included in G&A?

Target Fee

fee (of target cost).

Instructor/Contracting Officer/Buyer: Assume that the agency structured method used was the Weighted Guidelines. CON104 provided instruction on use of Weighted Guidelines. For this case, assume that the calculated amount of fee equated to

of objective target cost. No cost of money was proposed. Students will use the pessimistic and optimistic cost to calculate minimum and maximum fees for this case.

Thoughts and Comments from the Instructor:

1. Why is it very likely that a service oriented company would not propose Facilities Capital Cost of Money?

2. Discuss how the Weighted Guidelines could be used to develop a minimum and maximum fee; and how with share ratios pessimistic and optimistic costs could be calculated.

3. Discuss how the minimum and maximum fee could be calculated given share ratios and optimistic/pessimistic costs.

4. Discuss how the dollar amount of potential share (over or under) must be enough to provide effective incentive.

7. CPIF Share Ratios. 90/10 Over 70/30 Under

Due to the age of these systems, it is very possible that we might experience a significant increase in the occurrence of system breakdowns (out of our control) over the next three years. The systems are very old. Therefore, we believe a 10% contractor over target share is appropriate. As we continue our excellent performance we will also strive to control costs. We believe that a 30% contractor under target is appropriate.

Technical input. See discussion under on-call labor regarding anticipated computer system breakdowns/failures. We believe the government objective should be based on share ratio’s that equally motivate contractor cost control whether over or under target cost. We recommend an 80/20 over/under share ratio.

Thoughts and Comments from the Instructor:

1. It may be worthwhile to review the difference between the proposed 90/10 and 70/30 ratios. Why does it make sense that the contractor would propose 90/10 given its anticipation of future breakdowns?

2. Prompt clarifying discussion on why the most likely causes of over target costs are a significant factor in determining the over target share.

3. Ask what yourself questions you would raise as the contracting rep on an IPT doing an acquisition strategy planning session.

4. Discuss where to go on Desktop for guidance/policy on incentive contracts.

8. Optimistic/

Pessimistic Cost

Based on our assessment of probable performance outcomes, we believe the range of possible cost outcomes ranges from approximately

84%

110%

of target cost.

Instructor/Contracting Officer/Technical input. We believe the range of incentive effectiveness is between 84% and

115%

of the Government objective target cost.

Thoughts and Comments from the Instructor:

1. Ask what type of contract the CPIF effectively becomes once incurred costs hit pessimistic cost.

2. Ask yourself what questions you would raise as the contracting rep on an IPT doing an acquisition strategy planning session.

3. Discuss where to go on Desktop for guidance/policy on incentive contracts.

ATTACHMENT 2

10 August 1998

Memorandum for the Negotiation Team

From: Base Computer Center Engineering

Subject: Technical Evaluation of McGhee Systems Proposal

We have reviewed the McGhee Systems proposal and provide the following comments:

General comments: We believe there will not be a significant increase in experienced computer system breakdowns/failures over the next three years. Our experience has been that the rate of system breakdowns/failures has leveled off over the past two years. However, we do believe that there are significant opportunities for improving cost control both for labor and material. We believe that the range between pessimistic and optimistic costs is between (approximately) 84% and 115% of target cost (as calculated per our input on labor and material).

Labor:

The labor for “on-site support” is “business as usual;” the same labor types and quantities used to perform under the current contract. The McGhee Systems approach treats the on-site labor as a fixed cost to provide minimum on-site support. Our requirement is to have on-site support, not specifically that we have two of each analyst. We have discussed with the contractor the idea of better using the analysts, perhaps by cutting back to one on-site for each analyst labor category and having one floating back and forth as needed. Through our market research we also note that ten percent of computer support is now provided remotely. There appears to be ample opportunity for McGhee Systems to provide support in a more cost effective manner. They are concerned about being able to continue the less than two percent downtime that we have experienced should the old systems start frequently breaking down. We can’t argue that the possibility exists AND we definitely don’t want to jeopardize performance.

Therefore, we recommend that the Government objective be based on use of the proposed labor except for database analysts. We are certain that the workload for database analyst support has decreased significantly. We haven’t created any new significant databases in three years and the current database structures and uses are very stable. We recommend the Government objective be based on use of one database analyst at each site with one floater.

We take no exception to the contractor’s contention that it is hard to find and retain personnel with the skills required to support these systems.

Again, we agree with the strategy to use the incentive contract approach. We believe this approach will allow us to get both the continued satisfactory support AND motivate the contractor to control costs.

In contrast to the on-site labor, “on-call labor” is the variable part of the total labor required to support the computer centers. Whereas the on-site personnel are “at work” whether or not there is a computer system problem, the on-call labor is used only if someone needs to be called during off-hours to resolve a problem.

The contractor’s proposed on-call hours reflect their concern that we could easily experience a significant increase in computer system failures.

We contend that past enhancements have solved most of the problems that have caused past, recurring breakdowns. We expect continuation of the current breakdown/failure rates. We recommend the following estimate of on-call overtime hours be used for developing the Government estimate.

1999

2000

2001

Basic

Option1

Option2

Applics Sys Anal II

Progr Analyst II

Database Anal/Prog II

Objective/Est’d ON-CALL HOURS/Month

Material:

The proposed materials for SCHEDULED maintenance on the various computer systems are based on materials required for scheduled maintenance identified in the respective system technical manuals.

All OTHER proposed material is based on use of a materials growth factor. McGhee Systems estimates that material requirements will significantly increase for unscheduled maintenance, minor system enhancements, and miscellaneous support. Again, we disagree with McGhee Systems that there will be a significant increase in the occurrence of system breakdowns/failures. We believe that past enhancements have stablized the requirement for unexpected maintenance.

The following summarizes the proposed and recommended growth factors for materials supporting unscheduled maintenance, minor system enhancements, and miscellaneous use:

Material Growth Factors – Proposed

1999

2000

2001

Unscheduled

1.30

Minor Enhancements

1.40

Miscellaneous

1.10

Material Growth Factors – Govt Objective

1999

2000

2001

Unscheduled

1.00

1.05

1.10

Minor Enhancements

1.00

0.25

Miscellaneous

1.05

Gary Louden

System Management Section

System Technology Branch

Attachment 3

DCAA Input (received via email):

Labor:

DCAA verified 1998 labor categories/rate, and overtime factor currently paid under the existing contract. DCAA has verified the proposed escalation as being per current DRI escalation for automated data processing support personnel. DCAA did not have time to assess the proposed additional escalation justified based on tight labor market conditions. Proposed overtime factor of 1.5 is per industry standard. All rates are above DOL Service Contract Act minimums.

Material:

McGhee Systems proposed escalation of material costs using DRI escalation for electronic components. DCAA takes no exception to the proposed escalation (which is negative due to deflation occurring and projected to occur for computer electronic components).

Fringe:

DCAA reviewed the proposed per labor hour fringe cost and took no exception.

Overhead:

DCAA reviewed the proposed overhead rates and takes exception to 3% of the proposed overhead rates proposed for 2000 and 2001. We reviewed their internal analysis of business base projections; both basis and calculations. Many of their existing contracts will be completed and they project a dramatic decline in follow-on work. DCAA recommendation is based on using contractor’s most likely business base estimate from its range of estimates.

G&A:

DCAA reviewed the proposed G&A rate and takes exception to 2% of the proposed overhead rates proposed for 2000 and 2001. See comments under overhead.

Sincerely,

DCAA Auditor

Assignment 1

Develop and present the Government objective to management (instructor and class). Turn in the pre-PNM, with supporting spreadsheet, and any presentation material to the instructor. The pre-PNM must identify all incentive elements of the anticipated CPIF contract.

Assignment 2

Assignment 3

The contract is complete. Final CPIF Price. Using your CPIF

Target Cost

/Fee and incentive elements from Assignment 1 (assume the equitable adjustment never occurred), what is the final CPIF price if McGhee Systems experienced final incurred cost of $700,000 under target cost.

McGhee Systems Proposal/Objective

OPTION 2

-Proposed/2001

Hours

2000 Rate

Esc

2001 Rate

Total

On-Site Support

Applics Sys Anal II

8,320

$26.85

1.056

$28.35

$235,895

Progr Analyst II

8,320

$28.02

1.056

$29.59

$246,216

Database Anal/Prog II

8,320

$17.71

1.056

$18.70

$155,593

Computer Spt/Ops II

34,944

$31.19

1.056

$32.94

$1,151,098

Systems Administrator

17,472

$39.68

1.056

$41.91

$732,194

On-call Support

Applics Sys Anal II

960

$42.53

$40,828

Progr Analyst II

1,080

$44.39

$47,941

Database Anal/Prog II
960

$28.05

$26,930

Total labor

80,376

$2,636,695

Fringe
$1.47

$113,743

Labor Overhead

50%

$1,260,498

Material

scheduled

0.930

$204,514

unscheduled

1.284

$245,082

minor enhancements

1.383

$76,525

misc

1.087

$9,898

Total Material

$536,020

G&A
25%

$1,136,739

Target Cost

$5,683,696

Target Fee

11%

$625,207

Target Price

Option 2

$6,308,902

Minimum Fee

$568,370

Maximum Fee

$898,024

Optimistic Cost

$4,774,304

Pessimistic Cost

$6,252,065

Contractor Share % Over

10%

Contractor Share % Under

30%

PROPOSED

BASIC

-Proposed/1999

Hours

Total
On-Site Support
Hours

1998 Rate

Esc

1999 Rate

Total

Applics Sys Anal II

8,320

$24.05

1.056

$25.40

$211,339

Progr Analyst II
8,320

$25.11

1.056

$26.51

$220,586

Database Anal/Prog II
8,320

$15.87

1.056

$16.75

$139,396

Computer Spt/Ops II

34,944

$27.95

1.056

$29.51

$1,031,273

Systems Administrator
17,472

$35.55

1.056

$37.54

$655,975

On-call Support
Hours
1999 Rate
Total
Applics Sys Anal II
720
$38.10

$27,433

Progr Analyst II

840

$39.77

$33,406

Database Anal/Prog II
720

$25.13

$18,095

Total labor

79,656

$2,337,503

Fringe
$1.47
$113,743
Overhead
35%

$790,499

Material
scheduled

$200,000

unscheduled

1.261

$151,320

minor enhancements

1.358

$40,740

misc

1.067

$8,536

Total Material

$400,596

G&A
15%

$546,351

Target Cost

$4,188,692

Target Fee
11%

$460,756

Target Price Basic

$4,649,448

Minimum Fee

$418,869

Maximum Fee

$661,813

Optimistic Cost

$3,518,501

Pessimistic Cost

$4,607,561

Contractor Share % Over
10%
Contractor Share % Under
30%

OPTION 1

-Proposed/2000

Hours
1999 Rate
Esc
2000 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$25.40

1.057

$26.85

$223,386

Progr Analyst II
8,320
$26.51
1.057
$28.02

$233,159

Database Anal/Prog II
8,320
$16.75
1.057
$17.71

$147,342

Computer Spt/Ops II
34,944
$29.51
1.057
$31.19

$1,090,055

Systems Administrator
17,472
$37.54
1.057
$39.68

$693,366

On-call Support

Applics Sys Anal II
840

$40.27

$33,830

Progr Analyst II
960

$42.04

$40,354

Database Anal/Prog II
840

$26.56

$22,314

Total labor

80,016

$2,483,806

Fringe
$1.47
$113,743
Overhead

50%

$1,193,654

Material
scheduled

0.941

$225,816

unscheduled
1.261

$190,815

minor enhancements
1.358

$55,325

misc
1.067

$9,108

Total Material

$481,063

G&A
25%

$1,068,066

Target Cost

$5,340,332

Target Fee
11%

$587,437

Target Price Option 1

$5,927,768

Minimum Fee

$534,033

Maximum Fee

$843,772

Optimistic Cost

$4,485,879

Pessimistic Cost

$5,874,365

Contractor Share % Over
10%
Contractor Share % Under
30%
McGhee Systems Proposal

Services Case

As of 29 Jun 99

Proposed vs Objective

PROPOSED

OBJECTIVE

Be prepared to explain variances over 10% in your presentation

TOTAL Target Cost

$15,212,720

$13,820,942

FAR Part 37 Service Contracting

TOTAL Target Fee

$1,673,399

$1,243,885

FAR 22.10 Service Contract Act of 1965

TOTAL Target Price

$16,886,119

$15,064,827

FAR 22.103-5 Basic Labor Policies/Contract Clauses

Minimum Fee

$1,521,272

$829,257

FAR 52.222-41 SCA of 1965

Maximum Fee

$2,403,610

$1,686,155

Total Optimistic Cost

$12,778,685

$11,609,591

Total Pessimistic Cost

$16,733,992

$15,894,084

1999
1999
2000
2000
2001
2001
Proposed
Objective
Proposed
Objective
Proposed
Objective

BASIC
BASIC

Variance

OPTION 1
OPTION 1
Variance
OPTION 2
OPTION 2
Variance
On-Site Support
Applics Sys Anal II
$211,339
$211,339
0%
$223,386
$223,386
0%
$235,895
$235,895
0%
Progr Analyst II
$220,586
$220,586
0%
$233,159
$233,159
0%
$246,216
$246,216
0%
Database Anal/Prog II
$139,396

$69,698

50%
$147,342

$73,671

50%
$155,593

$77,796

50%
Computer Spt/Ops II
$1,031,273
$1,031,273
0%
$1,090,055
$1,090,055
0%
$1,151,098
$1,151,098
0%
Systems Administrator
$655,975
$655,975
0%
$693,366
$693,366
0%
$732,194
$732,194
0%
On-call Support

Applics Sys Anal II
$27,433

$13,717

50%
$33,830

$14,499

$40,828

$20,414

50%
Progr Analyst II
$33,406

$9,545

71%

$40,354

$10,089

75%

$47,941

$15,980

67%

Database Anal/Prog II
$18,095

$6,032

67%
$22,314

$6,375

71%
$26,930

$10,099

63%

Total labor
$2,337,503

$2,218,164

5%
$2,483,806

$2,344,599

$2,636,695

$2,489,693

6%
Fringe
$113,743

$107,628

5%
$113,743
$107,628
5%
$113,743
$107,628
5%
Labor Overhead
$790,499

$766,105

3%
$1,193,654

$1,087,409

9%
$1,260,498

$1,148,304

Material

scheduled
$200,000
$200,000
0%
$225,816
$225,816
0%
$204,514
$204,514
0%
unscheduled
$151,320

$116,400

23%

$190,815

$118,553

38%

$245,082

$128,844

47%

minor enhancements
$40,740

$29,100

29%

$55,325

$28,227

49%

$76,525

$6,972

91%

misc
$8,536

$8,148

5%
$9,108

$8,299

9%
$9,898

$8,609

13%

Total Material
$400,596

$353,648

12%

$481,063

$380,895

21%

$536,020

$348,939

35%

G&A
$546,351

$516,832

5%
$1,068,066

$901,722

16%

$1,136,739

$941,750

17%

Target Cost
$4,188,692

$3,962,376

5%
$5,340,332

$4,822,253

10%
$5,683,696

$5,036,313

11%
Target Fee
$460,756

$356,614

23%
$587,437

$434,003

26%

$625,207

$453,268

28%

Target Price
$4,649,448

$4,318,990

7%
$5,927,768

$5,256,256

11%
$6,308,902

$5,489,582

13%
Minimum Fee
$418,869

$237,743

43%

$534,033

$289,335

46%

$568,370

$302,179

47%
Maximum Fee
$661,813

$483,410

27%

$843,772

$588,315

30%
$898,024

$614,430

32%

Optimistic Cost
$3,518,501

$3,328,396

5%
$4,485,879

$4,050,693

10%
$4,774,304

$4,230,503

11%
Pessimistic Cost
$4,607,561

$4,556,732

1%
$5,874,365

$5,545,591

6%
$6,252,065

$5,791,760

7%
Contractor Share % Over
10%
20%
10%
20%
10%
20%
Contractor Share % Under
30%
20%
30%
20%
30%
20%

Opt Cost Under Target

84%
84%
84%
84%
84%
84%

Pess Cost Over Target

110%
115%

110%
115%
110%
115%

OBJECTIVE

Escalated

BASIC-Objective/1999

Hours
1998 Rate
Esc
1999 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$24.05
1.056
$25.40
$211,339
Progr Analyst II
8,320
$25.11
1.056
$26.51
$220,586
Database Anal/Prog II

4,160

$15.87
1.056
$16.75
$69,698
Computer Spt/Ops II
34,944
$27.95
1.056
$29.51
$1,031,273
Objective/Est’d ON-CALL HOURS/Month
Systems Administrator
17,472
$35.55
1.056
$37.54
$655,975
1999
2000
2001
On-call Support
Basic
Option1
Option2
Applics Sys Anal II

360

$38.10
$13,717
Applics Sys Anal II
15
15
20
Progr Analyst II

240

$39.77
$9,545
Progr Analyst II
10
10
15
Database Anal/Prog II
240
$25.13
$6,032
Database Anal/Prog II
10
10
15
Total labor

74,056

$2,218,164
Fringe
$1.47
$107,628
Labor Overhead
35%
$766,105
Material
scheduled

$200,000
unscheduled

0.970

$116,400
minor enhancements
0.970
$29,100
misc

1.019

$8,148
Total Material
$353,648
G&A
15%
$516,832
Target Cost
$3,962,376

Overrun

Underrun

Target Fee
9%
$356,614

Min/Pess

Max/Opt

Target Price Basic
$4,318,990
Target Fee
$356,614
$356,614
Minimum Fee
$237,743

Adjustment

-$118,871

$126,796

Maximum Fee
$483,410

Final Fee

$237,743
$483,410
Optimistic Cost
$3,328,396

% of Target

6%
12%
Pessimistic Cost
$4,556,732

Range

Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

OBJECTIVE

Escalated

OPTION 1-Proposed/2000

Hours
1999 Rate
Esc
2000 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$25.40
1.057
$26.85
$223,386
Progr Analyst II
8,320
$26.51
1.057
$28.02
$233,159
Database Anal/Prog II
4,160
$16.75
1.057
$17.71
$73,671
Computer Spt/Ops II
34,944
$29.51
1.057
$31.19
$1,090,055
Objective/Est’d ON-CALL HOURS/Month
Systems Administrator
17,472
$37.54
1.057
$39.68
$693,366
1999
2000
2001
On-call Support
Basic
Option1
Option2
Applics Sys Anal II
360
$40.27
$14,499
Applics Sys Anal II
15
15
20
Progr Analyst II
240
$42.04
$10,089
Progr Analyst II
10
10
15
Database Anal/Prog II
240
$26.56
$6,375
Database Anal/Prog II
10
10
15
Total labor
74,056

-$144,668

$154,312

Maximum Fee
$588,315
Final Fee
$289,335
$588,315
Optimistic Cost
$4,050,693
% of Target
6%
12%
Pessimistic Cost
$5,545,591
Range
Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

OBJECTIVE

Escalated

OPTION 2-Objective/2001

480

$42.53
$20,414
Applics Sys Anal II
15
15
20
Progr Analyst II
360
$44.39
$15,980
Progr Analyst II
10
10
15
Database Anal/Prog II
360
$28.05
$10,099
Database Anal/Prog II
10
10
15
Total labor

74,416

$2,489,693
Fringe
$1.47
$107,628
Labor Overhead
47%
$1,148,304
Material
scheduled
0.930
$204,514
unscheduled
1.087
$128,844
minor enhancements

0.247

$6,972
misc

1.037

$8,609
Total Material
$348,939
G&A
23%
$941,750
Target Cost
$5,036,313
Overrun
Underrun
Target Fee
9%
$453,268
Min/Pess
Max/Opt

Target Price Option 2

$5,489,582
Target Fee
$453,268
$453,268
Minimum Fee
$302,179
Adjustment

-$151,089

$161,162

Maximum Fee
$614,430
Final Fee
$302,179
$614,430
Optimistic Cost
$4,230,503
% of Target
6%
12%
Pessimistic Cost
$5,791,760
Range
Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

� EMBED Excel.Sheet.8 ��

PROPOSED

BASIC-Proposed/1999

Hours

Total
On-Site Support
Hours
1998 Rate
Esc
1999 Rate
Total
Applics Sys Anal II
8,320
$24.05
1.056
$25.40
$211,339
Progr Analyst II
8,320
$25.11
1.056
$26.51
$220,586
Database Anal/Prog II
8,320
$15.87
1.056
$16.75
$139,396
Computer Spt/Ops II
34,944
$27.95
1.056
$29.51
$1,031,273
Systems Administrator
17,472
$35.55
1.056
$37.54
$655,975
On-call Support
Hours
1999 Rate
Total
Applics Sys Anal II
720
$38.10
$27,433
Progr Analyst II
840
$39.77
$33,406
Database Anal/Prog II
720
$25.13
$18,095
Total labor
79,656
$2,337,503
Fringe
$1.47
$113,743
Overhead
35%
$790,499
Material
scheduled
$200,000
unscheduled
1.261
$151,320
minor enhancements
1.358
$40,740
misc
1.067
$8,536
Total Material
$400,596
G&A
15%
$546,351
Target Cost
$4,188,692
Target Fee
11%
$460,756
Target Price Basic
$4,649,448
Minimum Fee
$418,869
Maximum Fee
$661,813
Optimistic Cost
$3,518,501
Pessimistic Cost
$4,607,561
Contractor Share % Over
10%
Contractor Share % Under
30%

OPTION 1-Proposed/2000
Hours
1999 Rate
Esc
2000 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$25.40
1.057
$26.85
$223,386
Progr Analyst II
8,320
$26.51
1.057
$28.02
$233,159
Database Anal/Prog II
8,320
$16.75
1.057
$17.71
$147,342
Computer Spt/Ops II
34,944
$29.51
1.057
$31.19
$1,090,055
Systems Administrator
17,472
$37.54
1.057
$39.68
$693,366
On-call Support

Applics Sys Anal II
840
$40.27
$33,830
Progr Analyst II
960
$42.04
$40,354
Database Anal/Prog II
840
$26.56
$22,314
Total labor
80,016

$2,483,806
Fringe
$1.47
$113,743
Overhead

50%
$1,193,654
Material
scheduled
0.941
$225,816
unscheduled
1.261
$190,815
minor enhancements
1.358
$55,325
misc
1.067
$9,108
Total Material
$481,063
G&A
25%
$1,068,066
Target Cost
$5,340,332
Target Fee
11%
$587,437
Target Price Option 1
$5,927,768
Minimum Fee
$534,033
Maximum Fee
$843,772
Optimistic Cost
$4,485,879
Pessimistic Cost
$5,874,365
Contractor Share % Over
10%
Contractor Share % Under
30%

OPTION 2-Proposed/2001

Hours
2000 Rate
Esc
2001 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$26.85
1.056
$28.35
$235,895
Progr Analyst II
8,320
$28.02
1.056
$29.59
$246,216
Database Anal/Prog II
8,320
$17.71
1.056
$18.70
$155,593
Computer Spt/Ops II
34,944
$31.19
1.056
$32.94
$1,151,098
Systems Administrator
17,472
$39.68
1.056
$41.91
$732,194
On-call Support
Applics Sys Anal II
960
$42.53
$40,828
Progr Analyst II
1,080
$44.39
$47,941
Database Anal/Prog II
960
$28.05
$26,930
Total labor
80,376
$2,636,695
Fringe
$1.47
$113,743
Labor Overhead
50%
$1,260,498
Material
scheduled
0.930
$204,514
unscheduled
1.284
$245,082
minor enhancements
1.383
$76,525
misc
1.087
$9,898
Total Material
$536,020
G&A
25%
$1,136,739
Target Cost
$5,683,696
Target Fee
11%
$625,207
Target Price Option 2
$6,308,902
Minimum Fee
$568,370
Maximum Fee
$898,024
Optimistic Cost
$4,774,304
Pessimistic Cost
$6,252,065
Contractor Share % Over
10%
Contractor Share % Under
30%

Services Case
As of 29 Jun 99
Proposed vs Objective
PROPOSED
OBJECTIVE
Be prepared to explain variances over 10% in your presentation
TOTAL Target Cost
$15,212,720
$13,820,942
FAR Part 37 Service Contracting
TOTAL Target Fee
$1,673,399
$1,243,885
FAR 22.10 Service Contract Act of 1965
TOTAL Target Price
$16,886,119
$15,064,827
FAR 22.103-5 Basic Labor Policies/Contract Clauses
Minimum Fee
$1,521,272
$829,257
FAR 52.222-41 SCA of 1965
Maximum Fee
$2,403,610
$1,686,155

Total Optimistic Cost
$12,778,685
$11,609,591
Total Pessimistic Cost
$16,733,992
$15,894,084
1999
1999
2000
2000
2001
2001
Proposed
Objective
Proposed
Objective
Proposed
Objective

BASIC
BASIC
Variance
OPTION 1
OPTION 1
Variance
OPTION 2
OPTION 2
Variance
On-Site Support
Applics Sys Anal II
$211,339
$211,339
0%
$223,386
$223,386
0%
$235,895
$235,895
0%
Progr Analyst II
$220,586
$220,586
0%
$233,159
$233,159
0%
$246,216
$246,216
0%
Database Anal/Prog II
$139,396
$69,698
50%
$147,342
$73,671
50%
$155,593
$77,796
50%
Computer Spt/Ops II
$1,031,273
$1,031,273
0%
$1,090,055
$1,090,055
0%
$1,151,098
$1,151,098
0%
Systems Administrator
$655,975
$655,975
0%
$693,366
$693,366
0%
$732,194
$732,194
0%
On-call Support

Applics Sys Anal II
$27,433
$13,717
50%
$33,830
$14,499

57%

$40,828
$20,414
50%
Progr Analyst II
$33,406
$9,545
71%
$40,354
$10,089
75%
$47,941
$15,980
67%
Database Anal/Prog II
$18,095
$6,032
67%
$22,314
$6,375
71%
$26,930
$10,099
63%
Total labor
$2,337,503
$2,218,164
5%
$2,483,806
$2,344,599
6%
$2,636,695
$2,489,693
6%
Fringe
$113,743
$107,628
5%
$113,743
$107,628
5%
$113,743
$107,628
5%
Labor Overhead
$790,499
$766,105
3%
$1,193,654
$1,087,409
9%
$1,260,498
$1,148,304
9%

Material

scheduled
$200,000
$200,000
0%
$225,816
$225,816
0%
$204,514
$204,514
0%
unscheduled
$151,320
$116,400
23%
$190,815
$118,553
38%
$245,082
$128,844
47%
minor enhancements
$40,740
$29,100
29%
$55,325
$28,227
49%
$76,525
$6,972
91%
misc
$8,536
$8,148
5%
$9,108
$8,299
9%
$9,898
$8,609
13%
Total Material
$400,596
$353,648
12%
$481,063
$380,895
21%
$536,020
$348,939
35%

G&A
$546,351
$516,832
5%
$1,068,066
$901,722
16%
$1,136,739
$941,750
17%

Target Cost
$4,188,692
$3,962,376
5%
$5,340,332
$4,822,253
10%
$5,683,696
$5,036,313
11%
Target Fee
$460,756
$356,614
23%
$587,437
$434,003
26%
$625,207
$453,268
28%
Target Price
$4,649,448
$4,318,990
7%
$5,927,768
$5,256,256
11%
$6,308,902
$5,489,582
13%
Minimum Fee
$418,869
$237,743
43%
$534,033
$289,335
46%
$568,370
$302,179
47%
Maximum Fee
$661,813
$483,410
27%
$843,772
$588,315
30%
$898,024
$614,430
32%
Optimistic Cost
$3,518,501
$3,328,396
5%
$4,485,879
$4,050,693
10%
$4,774,304
$4,230,503
11%
Pessimistic Cost
$4,607,561
$4,556,732
1%
$5,874,365
$5,545,591
6%
$6,252,065
$5,791,760
7%
Contractor Share % Over
10%
20%
10%
20%
10%
20%
Contractor Share % Under
30%
20%
30%
20%
30%
20%
Opt Cost Under Target
84%
84%
84%
84%
84%
84%
Pess Cost Over Target
110%
115%

110%
115%
110%
115%

OBJECTIVE

Escalated
BASIC-Objective/1999
Hours
1998 Rate
Esc
1999 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$24.05
1.056
$25.40
$211,339
Progr Analyst II
8,320
$25.11
1.056
$26.51
$220,586
Database Anal/Prog II
4,160
$15.87
1.056
$16.75
$69,698
Computer Spt/Ops II
34,944
$27.95
1.056
$29.51
$1,031,273
Objective/Est’d ON-CALL HOURS/Month
Systems Administrator
17,472
$35.55
1.056
$37.54
$655,975
1999
2000
2001
On-call Support
Basic
Option1
Option2
Applics Sys Anal II
360
$38.10
$13,717
Applics Sys Anal II
15
15
20
Progr Analyst II
240
$39.77
$9,545
Progr Analyst II
10
10
15
Database Anal/Prog II
240
$25.13
$6,032
Database Anal/Prog II
10
10
15
Total labor
74,056
$2,218,164
Fringe
$1.47
$107,628
Labor Overhead
35%
$766,105
Material
scheduled

$200,000
unscheduled
0.970
$116,400
minor enhancements
0.970
$29,100
misc
1.019
$8,148
Total Material
$353,648
G&A
15%
$516,832
Target Cost
$3,962,376
Overrun
Underrun
Target Fee
9%
$356,614
Min/Pess
Max/Opt
Target Price Basic
$4,318,990
Target Fee
$356,614
$356,614
Minimum Fee
$237,743
Adjustment
-$118,871
$126,796
Maximum Fee
$483,410
Final Fee
$237,743
$483,410
Optimistic Cost
$3,328,396
% of Target
6%
12%
Pessimistic Cost
$4,556,732
Range
Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

OBJECTIVE

Escalated
OPTION 1-Proposed/2000
Hours
1999 Rate
Esc
2000 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$25.40
1.057
$26.85
$223,386
Progr Analyst II
8,320
$26.51
1.057
$28.02
$233,159
Database Anal/Prog II
4,160
$16.75
1.057
$17.71
$73,671
Computer Spt/Ops II
34,944
$29.51
1.057
$31.19
$1,090,055
Objective/Est’d ON-CALL HOURS/Month
Systems Administrator
17,472
$37.54
1.057
$39.68
$693,366
1999
2000
2001
On-call Support
Basic
Option1
Option2
Applics Sys Anal II
360
$40.27
$14,499
Applics Sys Anal II
15
15
20
Progr Analyst II
240
$42.04
$10,089
Progr Analyst II
10
10
15
Database Anal/Prog II
240
$26.56
$6,375
Database Anal/Prog II
10
10
15
Total labor
74,056

$2,344,599
Fringe
$1.47
$107,628
Labor Overhead
47%
$1,087,409
Material
scheduled
0.941
$225,816
unscheduled
1.019
$118,553
minor enhancements
0.970
$28,227
misc
1.019
$8,299
Total Material
$380,895
G&A
23%
$901,722
Target Cost
$4,822,253
Overrun
Underrun
Target Fee
9%
$434,003
Min/Pess
Max/Opt
Target Price Option 1
$5,256,256
Target Fee
$434,003
$434,003
Minimum Fee
$289,335
Adjustment
-$144,668
$154,312
Maximum Fee
$588,315
Final Fee
$289,335
$588,315
Optimistic Cost
$4,050,693
% of Target
6%
12%
Pessimistic Cost
$5,545,591
Range
Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

OBJECTIVE

Escalated
OPTION 2-Objective/2001
Hours
2000 Rate
Esc
2001 Rate
Total
On-Site Support
Applics Sys Anal II
8,320
$26.85
1.056
$28.35
$235,895
Progr Analyst II
8,320
$28.02
1.056
$29.59
$246,216
Database Anal/Prog II
4,160
$17.71
1.056
$18.70
$77,796
Computer Spt/Ops II
34,944
$31.19
1.056
$32.94
$1,151,098
Objective/Est’d ON-CALL HOURS/Month
Systems Administrator
17,472
$39.68
1.056
$41.91
$732,194
1999
2000
2001
On-call Support
Basic
Option1
Option2
Applics Sys Anal II
480
$42.53
$20,414
Applics Sys Anal II
15
15
20
Progr Analyst II
360
$44.39
$15,980
Progr Analyst II
10
10
15
Database Anal/Prog II
360
$28.05
$10,099
Database Anal/Prog II
10
10
15
Total labor
74,416
$2,489,693
Fringe
$1.47
$107,628
Labor Overhead
47%
$1,148,304
Material
scheduled
0.930
$204,514
unscheduled
1.087
$128,844
minor enhancements
0.247
$6,972
misc
1.037
$8,609
Total Material
$348,939
G&A
23%
$941,750
Target Cost
$5,036,313
Overrun
Underrun
Target Fee
9%
$453,268
Min/Pess
Max/Opt
Target Price Option 2
$5,489,582
Target Fee
$453,268
$453,268
Minimum Fee
$302,179
Adjustment
-$151,089
$161,162
Maximum Fee
$614,430
Final Fee
$302,179
$614,430
Optimistic Cost
$4,230,503
% of Target
6%
12%
Pessimistic Cost
$5,791,760
Range
Range
Contractor Share % Over
20%
84%
115%
Contractor Share % Under
20%

_992163679.xls
Option2

PROPOSED

OPTION 2-Proposed/2001 Hours 2000 Rate Esc 2001 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $26.85 1.056 $28.35 $235,895

Progr Analyst II 8,320 $28.02 1.056 $29.59 $246,216

Database Anal/Prog II 8,320 $17.71 1.056 $18.70 $155,593

Computer Spt/Ops II 34,944 $31.19 1.056 $32.94 $1,151,098 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $39.68 1.056 $41.91 $732,194 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 960 $42.53 $40,828 Applics Sys Anal II 30 35 40

Progr Analyst II 1,080 $44.39 $47,941 Progr Analyst II 35 40 45

Database Anal/Prog II 960 $28.05 $26,930 Database Anal/Prog II 30 35 40

Total labor 80,376 $2,636,695

Fringe $1.47 $113,743

Labor Overhead 50% $1,260,498

Material

scheduled 0.930 $204,514

unscheduled 1.284 $245,082

minor enhancements 1.383 $76,525

misc 1.087 $9,898

Total Material $536,020

G&A 25% $1,136,739

Target Cost $5,683,696

Target Fee 11% $625,207

Target Price Option 2 $6,308,902

Minimum Fee $568,370

Maximum Fee $898,024

Optimistic Cost $4,774,304

Pessimistic Cost $6,252,065

Contractor Share % Over 10%

Contractor Share % Under 30%

OBJECTIVE

Escalated

OPTION 2-Objective/2001 Hours 2000 Rate Esc 2001 Rate Total

On-Site Support

Applics Sys Anal II 0 $0.00 0.000 $0.00 $0

Progr Analyst II 0 $0.00 0.000 $0.00 $0

Database Anal/Prog II 0 $0.00 0.000 $0.00 $0

Computer Spt/Ops II 0 $0.00 0.000 $0.00 $0 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 0 $0.00 0.000 $0.00 $0 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 0 $0.00 $0 Applics Sys Anal II 0 0 0

Progr Analyst II 0 $0.00 $0 Progr Analyst II 0 0 0

Database Anal/Prog II 0 $0.00 $0 Database Anal/Prog II 0 0 0

Total labor 0 $0

Fringe $0.00 $0

Labor Overhead 0% $0

Material

scheduled 0.000 $0

unscheduled 0.000 $0

minor enhancements 0.000 $0

misc 0.000 $0

Total Material $0

G&A 0% $0

Target Cost $0

Target Fee 9% $0

Target Price Option 2 $0

Minimum Fee $0

Maximum Fee $0

Optimistic Cost $0

Pessimistic Cost $0

Contractor Share % Over 0%

Contractor Share % Under 0%

Summary

Services Case As of 29 Jun 99

Proposed vs Objective

PROPOSED OBJECTIVE Be prepared to explain large variances

TOTAL Target Cost $15,212,720 $0 FAR Part 37 Service Contracting

TOTAL Target Fee $1,673,399 $0 FAR 22.10 Service Contract Act of 1965

TOTAL Target Price $16,886,119 $0 FAR 22.103-5 Basic Labor Policies/Contract Clauses

Minimum Fee $1,521,272 $0 FAR 52.222-41 SCA of 1965

Maximum Fee $2,403,609 $0

Total Optimistic Cost $12,778,685 $0

Total Pessimistic Cost $16,733,992 $0

1999 1999 2000 2000 2001 2001

Proposed Objective Proposed Objective Proposed Objective

BASIC BASIC Variance OPTION 1 OPTION 1 Variance OPTION 2 OPTION 2 Variance

On-Site Support

Applics Sys Anal II $211,339 $0 100% $223,386 $0 100% $235,895 $0 100%

Progr Analyst II $220,586 $0 100% $233,159 $0 100% $246,216 $0 100%

Database Anal/Prog II $139,396 $0 100% $147,342 $0 100% $155,593 $0 100%

Computer Spt/Ops II $1,031,273 $0 100% $1,090,055 $0 100% $1,151,098 $0 100%

Systems Administrator $655,975 $0 100% $693,366 $0 100% $732,194 $0 100%

On-call Support

Applics Sys Anal II $27,433 $0 100% $33,830 $0 100% $40,828 $0 100%

Progr Analyst II $33,406 $0 100% $40,354 $0 100% $47,941 $0 100%

Database Anal/Prog II $18,095 $0 100% $22,314 $0 100% $26,930 $0 100%

Total labor $2,337,503 $0 100% $2,483,806 $0 100% $2,636,695 $0 100%

Fringe $113,743 $0 100% $113,743 $0 100% $113,743 $0 100%

Labor Overhead $790,499 $0 100% $1,193,654 $0 100% $1,260,498 $0 100%

Material

scheduled $200,000 $0 100% $225,816 $0 100% $204,514 $0 100%

unscheduled $151,320 $0 100% $190,815 $0 100% $245,082 $0 100%

minor enhancements $40,740 $0 100% $55,325 $0 100% $76,525 $0 100%

misc $8,536 $0 100% $9,108 $0 100% $9,898 $0 100%

Total Material $400,596 $0 100% $481,063 $0 100% $536,020 $0 100%

G&A $546,351 $0 100% $1,068,066 $0 100% $1,136,739 $0 100%

Target Cost $4,188,692 $0 100% $5,340,332 $0 100% $5,683,696 $0 100%

Target Fee $460,756 $0 100% $587,437 $0 100% $625,207 $0 100%

Target Price $4,649,448 $0 100% $5,927,768 $0 100% $6,308,902 $0 100%

Minimum Fee $418,869 $0 100% $534,033 $0 100% $568,370 $0 100%

Maximum Fee $661,813 $0 100% $843,772 $0 100% $898,024 $0 100%

Optimistic Cost $3,518,501 $0 100% $4,485,879 $0 100% $4,774,304 $0 100%

Pessimistic Cost $4,607,561 $0 100% $5,874,365 $0 100% $6,252,065 $0 100%

Contractor Share % Over 10% 0% 10% 0% 10% 0%

Contractor Share % Under 30% 0% 30% 0% 30% 0%

Opt Cost Under Target 84% 0% 84% 0% 84% 0%

Pess Cost Over Target 110% 0% 110% 0% 110% 0%

Basic

PROPOSED

BASIC-Proposed/1999 Hours Total

On-Site Support Hours 1998 Rate Esc 1999 Rate Total

Applics Sys Anal II 8,320 $24.05 1.056 $25.40 $211,339

Progr Analyst II 8,320 $25.11 1.056 $26.51 $220,586

Database Anal/Prog II 8,320 $15.87 1.056 $16.75 $139,396

Computer Spt/Ops II 34,944 $27.95 1.056 $29.51 $1,031,273 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $35.55 1.056 $37.54 $655,975 1999 2000 2001

On-call Support Hours 1999 Rate Total Basic Option1 Option2

Applics Sys Anal II 720 $38.10 $27,433 Applics Sys Anal II 30 35 40

Progr Analyst II 840 $39.77 $33,406 Progr Analyst II 35 40 45

Database Anal/Prog II 720 $25.13 $18,095 Database Anal/Prog II 30 35 40

Total labor 79,656 $2,337,503

Fringe $1.47 $113,743

Overhead 35% $790,499

Material

scheduled $200,000

unscheduled 1.261 $151,320

minor enhancements 1.358 $40,740

misc 1.067 $8,536

Total Material $400,596

G&A 15% $546,351

Target Cost $4,188,692

Target Fee 11% $460,756

Target Price Basic $4,649,448

Minimum Fee $418,869

Maximum Fee $661,813

Optimistic Cost $3,518,501

Pessimistic Cost $4,607,561

Contractor Share % Over 10%

Contractor Share % Under 30%

OBJECTIVE

BASIC-Objective/1999 Hours 1998 Rate Esc 1999 Rate Total

On-Site Support

Applics Sys Anal II 0 $0.00 0.000 $0.00 $0

Progr Analyst II 0 $0.00 0.000 $0.00 $0

Database Anal/Prog II 0 $0.00 0.000 $0.00 $0

Computer Spt/Ops II 0 $0.00 0.000 $0.00 $0 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 0 $0.00 0.000 $0.00 $0 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 0 $0.00 $0 Applics Sys Anal II 0 0 0

Progr Analyst II 0 $0.00 $0 Progr Analyst II 0 0 0

Database Anal/Prog II 0 $0.00 $0 Database Anal/Prog II 0 0 0

Total labor 0 $0

Fringe $0.00 $0

Labor Overhead 0% $0

Material

scheduled $0

unscheduled 0.000 $0

minor enhancements 0.000 $0

misc 0.000 $0

Total Material $0

G&A 0% $0

Target Cost $0

Target Fee 9% $0

Target Price Basic $0

Minimum Fee $0

Maximum Fee $0

Optimistic Cost $0

Pessimistic Cost $0

Contractor Share % Over 0%

Contractor Share % Under 0%

Option1

PROPOSED

OPTION 1-Proposed/2000 Hours 1999 Rate Esc 2000 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $25.40 1.057 $26.85 $223,386

Progr Analyst II 8,320 $26.51 1.057 $28.02 $233,159

Database Anal/Prog II 8,320 $16.75 1.057 $17.71 $147,342

Computer Spt/Ops II 34,944 $29.51 1.057 $31.19 $1,090,055 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $37.54 1.057 $39.68 $693,366 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 840 $40.27 $33,830 Applics Sys Anal II 30 35 40

Progr Analyst II 960 $42.04 $40,354 Progr Analyst II 35 40 45

Database Anal/Prog II 840 $26.56 $22,314 Database Anal/Prog II 30 35 40

Total labor 80,016 $2,483,806

Fringe $1.47 $113,743

Overhead 50% $1,193,654

Material

scheduled 0.941 $225,816

unscheduled 1.261 $190,815

minor enhancements 1.358 $55,325

misc 1.067 $9,108

Total Material $481,063

G&A 25% $1,068,066

Target Cost $5,340,332

Target Fee 11% $587,437

Target Price Option 1 $5,927,768

Minimum Fee $534,033

Maximum Fee $843,772

Optimistic Cost $4,485,879

Pessimistic Cost $5,874,365

Contractor Share % Over 10%

Contractor Share % Under 30%

OBJECTIVE

Escalated

OPTION 1-Proposed/2000 Hours 1999 Rate Esc 2000 Rate Total

On-Site Support

Applics Sys Anal II 0 $0.00 0.000 $0.00 $0

Progr Analyst II 0 $0.00 0.000 $0.00 $0

Database Anal/Prog II 0 $0.00 0.000 $0.00 $0

Computer Spt/Ops II 0 $0.00 0.000 $0.00 $0 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 0 $0.00 0.000 $0.00 $0 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 0 $0.00 $0 Applics Sys Anal II 0 0 0

Progr Analyst II 0 $0.00 $0 Progr Analyst II 0 0 0

Database Anal/Prog II 0 $0.00 $0 Database Anal/Prog II 0 0 0

Total labor 0 $0

Fringe $0.00 $0

Labor Overhead 0% $0

Material

scheduled 0.000 $0

unscheduled 0.000 $0

minor enhancements 0.000 $0

misc 0.000 $0

Total Material $0

G&A 0% $0

Target Cost $0

Target Fee 9% $0

Target Price Option 1 $0

Minimum Fee $0

Maximum Fee $0

Optimistic Cost $0

Pessimistic Cost $0

Contractor Share % Over 0%

Contractor Share % Under 0%

_992164559.xls
Option2

PROPOSED

OPTION 2-Proposed/2001 Hours 2000 Rate Esc 2001 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $26.85 1.056 $28.35 $235,895

Progr Analyst II 8,320 $28.02 1.056 $29.59 $246,216

Database Anal/Prog II 8,320 $17.71 1.056 $18.70 $155,593

Computer Spt/Ops II 34,944 $31.19 1.056 $32.94 $1,151,098 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $39.68 1.056 $41.91 $732,194 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 960 $42.53 $40,828 Applics Sys Anal II 30 35 40

Progr Analyst II 1,080 $44.39 $47,941 Progr Analyst II 35 40 45

Database Anal/Prog II 960 $28.05 $26,930 Database Anal/Prog II 30 35 40

Total labor 80,376 $2,636,695

Fringe $1.47 $113,743

Labor Overhead 50% $1,260,498

Material

scheduled 0.930 $204,514

unscheduled 1.284 $245,082

minor enhancements 1.383 $76,525

misc 1.087 $9,898

Total Material $536,020

G&A 25% $1,136,739

Target Cost $5,683,696 Overrun Underrun

Target Fee 11% $625,207 Min/Pess Max/Opt

Target Price Option 2 $6,308,902 Target Fee $625,207 $625,207

Minimum Fee $568,370 Adjustment -$56,837 $272,817

Maximum Fee $898,024 Final Fee $568,370 $898,024

Optimistic Cost $4,774,304 % of Target 10% 16%

Pessimistic Cost $6,252,065 Range Range

Contractor Share % Over 10% 84% 110%

Contractor Share % Under 30%

OBJECTIVE

Escalated

OPTION 2-Objective/2001 Hours 2000 Rate Esc 2001 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $26.85 1.056 $28.35 $235,895

Progr Analyst II 8,320 $28.02 1.056 $29.59 $246,216

Database Anal/Prog II 4,160 $17.71 1.056 $18.70 $77,796

Computer Spt/Ops II 34,944 $31.19 1.056 $32.94 $1,151,098 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $39.68 1.056 $41.91 $732,194 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 480 $42.53 $20,414 Applics Sys Anal II 15 15 20

Progr Analyst II 360 $44.39 $15,980 Progr Analyst II 10 10 15

Database Anal/Prog II 360 $28.05 $10,099 Database Anal/Prog II 10 10 15

Total labor 74,416 $2,489,693

Fringe $1.47 $107,628

Labor Overhead 47% $1,148,304

Material

scheduled 0.930 $204,514

unscheduled 1.087 $128,844

minor enhancements 0.247 $6,972

misc 1.037 $8,609

Total Material $348,939

G&A 23% $941,750

Target Cost $5,036,313 Overrun Underrun

Target Fee 9% $453,268 Min/Pess Max/Opt

Target Price Option 2 $5,489,582 Target Fee $453,268 $453,268

Minimum Fee $302,179 Adjustment -$151,089 $161,162

Maximum Fee $614,430 Final Fee $302,179 $614,430

Optimistic Cost $4,230,503 % of Target 6% 12%

Pessimistic Cost $5,791,760 Range Range

Contractor Share % Over 20% 84% 115%

Contractor Share % Under 20%

Company policy that all proposals use this rate
Company management directed use of 11% markup on total target cost.
Based on verifiable scheduled maintenance per computer maintenance manuals
Based on factor applied to 2000 unscheduled material costs.
Based on factor applied to 2000 misc material costs.
Company management directed for proposal purposes
Company management directed use of 90/10 overrun share for proposal purposes
Company management directed use of 70/30 underrun share for proposal purposes
Based on use of WGL
Based on technical/cost estimate range… pessimistic cost
Based on technical/cost estimate range… optimistic cost
Based on Govt team assessment ….. Stability of requirement… and need to motivate better cost control by contractor
Govt team agrees with proposed share for underrun.
Company management directed for proposal purposes
Instr:
Disagree on # hrs per month… agree on 1.5 factor for on-call rate.
Instr:
Disagree on # hrs per month… agree on 1.5 factor for on-call rate.
12 months x 2 sites x 30 hours per month
12 months x 2 sites x 30 hours per month
12 months x 2 sites x 30 hours per month
Proposed:
Current company 1998 rate for this labor category
1.5 x 2001 labor rate
1.5 x 2001 labor rate
1.5 x 2001 labor rate
DRI for 2001; Data Processing Services
Based on factor applied to 2000
minor enhancements material costs.
Proposed:
1.3 factor increase over 2000 unscheduled material.
(Minus) -1.2% escalation in material costs per DRI.
Proposed:
1.4 factor increase in 2000 minor enhancements material.
(Minus) -1.2% escalation in material costs per DRI.
Proposed:
1.1 factor increase over 1999 misc material.
(Minus) -1.2% escalation in material costs per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA min. DCAA reviewed and took no exception.
12 months x 2 sites x 20 hours per month
12 months x 2 sites x 15 hours per month
12 months x 2 sites x 15 hours per month
Objective:
1.5 x 2001 labor rate
Objective:
1.5 x 2001 labor rate
Objective:
1.5 x 2001 labor rate
Objective:
Based on verifiable scheduled maintenance per computer maintenance manuals
Objective:
1.1 factor(10%) increase over 2000 unscheduled material.
(Minus) -1.2% escalation in material costs per DRI.
Objective:
0.25 factor (75% decrease) of 2000 minor enhancements material.
(Minus) -1.2% escalation in material costs per DRI.
Objective:
1.05 factor(10%) increase over 2000 misc material.
(Minus) -1.2% escalation in material costs per DRI.
Objective:
Per DCAA – no exception taken. Compared to 1999, dramatic decrease in company sales
…smaller allocation base for G&A.
Objective:
Based on useage growth factor times DRI escalation for electronic components, applied to prior year unscheduled material cost estimate.
Objective:
Based on useage decrease factor(0.25) times DRI escalation for electronic components, applied to prior year minor enhancements material cost estimate.
Objective:
Based on useage growth factor times DRI escalation for electronic components, applied to prior year misc material cost estimate.
Less Overtime hours
Less Overtime Labor $
Less Overtime hours
Less Overtime Labor $
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
Proposed:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA/DOL min. DCAA reviewed and took no exception.
Proposed:
Base is labor dollars less overtime/on-call support labor dollars.
Proposed:
DRI for 1999, electronic components (-3%)
DRI for 2000, electronic components (-3%)
DRI for 2001, electronic components (-1.2%)
Proposed:
DRI for 1999, electronic components (-3%)
DRI for 2000, electronic components (-3%)
DRI for 2001, electronic components (-1.2%)
Objective:
DCAA questioned 3% of the 50% overhead rate proposed for 2001. Based on DCAA’s review of the contractor’s range of forecast business base/sales. The contractor forecasts a dramatic decrease in company business base/sales. DCAA’s recommendation based on use of contractor’s “most likely” forecast of business base volume.
….smaller allocation base for indirect costs. Contractor contends old computer systems that it traditionally supports are being replaced by systems that it has does not have the labor expertise to support.
DRI for 2001; Data Processing Services
DRI for 2001; Data Processing Services
DRI for 2001; Data Processing Services
DRI for 2001; Data Processing Services
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable

Wage Research

Wageweb DOL InfoNet DataMasters

Applics Sys Anal II $24.05 $22.05 $22.02 $26.39

Progr Analyst II $25.11 $21.85 $20.87 $24.18

Computer Spt/Ops II $15.87 $13.53 $17.69 $25.43

Database Anal/Prog II $27.95 $26.16 $17.69 $27.40

Systems Administrator $35.55 $26.63

Wageweb. www.wageweb.com

Dept of Labor/Services Contract Act. www.ceals.usace.army.mil/netahtml/srvc.html

InfoNet. www.acinet.org/acinet/

Summary

Services Case As of 29 Jun 99

Proposed vs Objective

PROPOSED OBJECTIVE Be prepared to explain variances over 10% in your presentation

TOTAL Target Cost $15,212,720 $13,820,942 FAR Part 37 Service Contracting

TOTAL Target Fee $1,673,399 $1,243,885 FAR 22.10 Service Contract Act of 1965

TOTAL Target Price $16,886,119 $15,064,827 FAR 22.103-5 Basic Labor Policies/Contract Clauses

Minimum Fee $1,521,272 $829,257 FAR 52.222-41 SCA of 1965

Maximum Fee $2,403,610 $1,686,155

Total Optimistic Cost $12,778,685 $11,609,591

Total Pessimistic Cost $16,733,992 $15,894,084

1999 1999 2000 2000 2001 2001

Proposed Objective Proposed Objective Proposed Objective

BASIC BASIC Variance OPTION 1 OPTION 1 Variance OPTION 2 OPTION 2 Variance

On-Site Support

Applics Sys Anal II $211,339 $211,339 0% $223,386 $223,386 0% $235,895 $235,895 0%

Progr Analyst II $220,586 $220,586 0% $233,159 $233,159 0% $246,216 $246,216 0%

Database Anal/Prog II $139,396 $69,698 50% $147,342 $73,671 50% $155,593 $77,796 50%

Computer Spt/Ops II $1,031,273 $1,031,273 0% $1,090,055 $1,090,055 0% $1,151,098 $1,151,098 0%

Systems Administrator $655,975 $655,975 0% $693,366 $693,366 0% $732,194 $732,194 0%

On-call Support

Applics Sys Anal II $27,433 $13,717 50% $33,830 $14,499 57% $40,828 $20,414 50%

Progr Analyst II $33,406 $9,545 71% $40,354 $10,089 75% $47,941 $15,980 67%

Database Anal/Prog II $18,095 $6,032 67% $22,314 $6,375 71% $26,930 $10,099 63%

Total labor $2,337,503 $2,218,164 5% $2,483,806 $2,344,599 6% $2,636,695 $2,489,693 6%

Fringe $113,743 $107,628 5% $113,743 $107,628 5% $113,743 $107,628 5%

Labor Overhead $790,499 $766,105 3% $1,193,654 $1,087,409 9% $1,260,498 $1,148,304 9%

Material

scheduled $200,000 $200,000 0% $225,816 $225,816 0% $204,514 $204,514 0%

unscheduled $151,320 $116,400 23% $190,815 $118,553 38% $245,082 $128,844 47%

minor enhancements $40,740 $29,100 29% $55,325 $28,227 49% $76,525 $6,972 91%

misc $8,536 $8,148 5% $9,108 $8,299 9% $9,898 $8,609 13%

Total Material $400,596 $353,648 12% $481,063 $380,895 21% $536,020 $348,939 35%

G&A $546,351 $516,832 5% $1,068,066 $901,722 16% $1,136,739 $941,750 17%

Target Cost $4,188,692 $3,962,376 5% $5,340,332 $4,822,253 10% $5,683,696 $5,036,313 11%

Target Fee $460,756 $356,614 23% $587,437 $434,003 26% $625,207 $453,268 28%

Target Price $4,649,448 $4,318,990 7% $5,927,768 $5,256,256 11% $6,308,902 $5,489,582 13%

Minimum Fee $418,869 $237,743 43% $534,033 $289,335 46% $568,370 $302,179 47%

Maximum Fee $661,813 $483,410 27% $843,772 $588,315 30% $898,024 $614,430 32%

Optimistic Cost $3,518,501 $3,328,396 5% $4,485,879 $4,050,693 10% $4,774,304 $4,230,503 11%

Pessimistic Cost $4,607,561 $4,556,732 1% $5,874,365 $5,545,591 6% $6,252,065 $5,791,760 7%

Contractor Share % Over 10% 20% 10% 20% 10% 20%

Contractor Share % Under 30% 20% 30% 20% 30% 20%

Opt Cost Under Target 84% 84% 84% 84% 84% 84%

Pess Cost Over Target 110% 115% 110% 115% 110% 115%

Instr:
Definite issue. Disagree with contractor. Moving to CPIF to motivate control of costs
Instr:
Definite issue. Disagree with contractor. Moving to CPIF to motivate control of costs
Instr:
Have groups calc opt and pessimitic based on proposed share…. And min and max fees.
Instr:
Have groups calc opt and pessimitic based on proposed share…. And min and max fees.
Instr:
Have students come to you after they have id’d an objective target cost. Give them the fee at that point.
qty of on-call hours

Basic

PROPOSED

BASIC-Proposed/1999 Hours 1998 Rate Esc 1999 Rate Total

On-Site Support Hours 1998 Rate Esc 1999 Rate Total

Applics Sys Anal II 8,320 $24.05 1.056 $25.40 $211,339

Progr Analyst II 8,320 $25.11 1.056 $26.51 $220,586

Database Anal/Prog II 8,320 $15.87 1.056 $16.75 $139,396

Computer Spt/Ops II 34,944 $27.95 1.056 $29.51 $1,031,273 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $35.55 1.056 $37.54 $655,975 1999 2000 2001

On-call Support Hours 1999 Rate Total Basic Option1 Option2

Applics Sys Anal II 720 $38.10 $27,433 Applics Sys Anal II 30 35 40

Progr Analyst II 840 $39.77 $33,406 Progr Analyst II 35 40 45

Database Anal/Prog II 720 $25.13 $18,095 Database Anal/Prog II 30 35 40

Total labor 79,656 $2,337,503

Fringe $1.47 $113,743

Overhead 35% $790,499

Material

scheduled $200,000

unscheduled 1.261 $151,320

minor enhancements 1.358 $40,740

misc 1.067 $8,536

Total Material $400,596

G&A 15% $546,351

Target Cost $4,188,692 Overrun Underrun

Target Fee 11% $460,756 Min/Pess Max/Opt

Target Price Basic $4,649,448 Target Fee $460,756 $460,756

Minimum Fee $418,869 Adjustment -$41,887 $201,057

Maximum Fee $661,813 Final Fee $418,869 $661,813

Optimistic Cost $3,518,501 % of Target 10% 16%

Pessimistic Cost $4,607,561 Range Range

Contractor Share % Over 10% 84% 110%

Contractor Share % Under 30%

OBJECTIVE

Escalated

BASIC-Objective/1999 Hours 1998 Rate Esc 1999 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $24.05 1.056 $25.40 $211,339

Progr Analyst II 8,320 $25.11 1.056 $26.51 $220,586

Database Anal/Prog II 4,160 $15.87 1.056 $16.75 $69,698

Computer Spt/Ops II 34,944 $27.95 1.056 $29.51 $1,031,273 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $35.55 1.056 $37.54 $655,975 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 360 $38.10 $13,717 Applics Sys Anal II 15 15 20

Progr Analyst II 240 $39.77 $9,545 Progr Analyst II 10 10 15

Database Anal/Prog II 240 $25.13 $6,032 Database Anal/Prog II 10 10 15

Total labor 74,056 $2,218,164

Fringe $1.47 $107,628

Labor Overhead 35% $766,105

Material

scheduled $200,000

unscheduled 0.970 $116,400

minor enhancements 0.970 $29,100

misc 1.019 $8,148

Total Material $353,648

G&A 15% $516,832

Target Cost $3,962,376 Overrun Underrun

Target Fee 9% $356,614 Min/Pess Max/Opt

Target Price Basic $4,318,990 Target Fee $356,614 $356,614

Minimum Fee $237,743 Adjustment -$118,871 $126,796

Maximum Fee $483,410 Final Fee $237,743 $483,410

Optimistic Cost $3,328,396 % of Target 6% 12%

Pessimistic Cost $4,556,732 Range Range

Contractor Share % Over 20% 84% 115%

Contractor Share % Under 20%

Proposed:
2080 hrs per year x 2 per site x 2 sites
12 months x 2 sites x 30 hours per month
12 months x 2 sites x 35 hours per month
Company management directed for proposal purposes
Company management directed for proposal purposes
Based on internal estimate of best case cost
Based on internal estimate of worst case cost
Company management directed use of 90/10 overrun share for proposal purposes
Company management directed use of 70/30 underrun share for proposal purposes
Company policy that all proposals use this rate
Proposed:
Base is labor dollars less overtime/on-call support labor dollars.
Company management directed use of 11% markup on total target cost.
Proposed:
Estimate of materials, based on 1998 actuals used to support unscheduled maintenance/repair of systems. Alos based on historical experience and expectation of increase in failures. Escalated per DRI/electronic components.
Proposed:
Estimate based on 1998 actuals, historical experience, and DRI escalation
Objective:
Per DCAA – no exception taken.
Objective:
Based on use of WGL
Based on technical/cost estimate range… pessimistic cost
Based on technical/cost estimate range… optimistic cost
Based on technical/cost estimate range…. Optimistic cost
Based on technical/cost estimate range…. Pessimistic cost
Based on Govt team assessment ….. Stability of requirement… and need to motivate better cost control by contractor
Govt team agrees with proposed share for underrun.
Instr:
Agree to proposed # of hours/yr. Labor rates proposed based on actuals. Disagree on esclation.
Instr:
Disagree on # hrs per month… agree on 1.5 factor for on-call rate.
Proposed:
2912 hrs/yr x 3 shifts per day x 2 persons per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
2912 hrs/yr x 3 shifts per day x 1 person per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
2080 hrs per year x 2 per site x 2 sites
Proposed:
2080 hrs per year x 2 per site x 2 sites
12 months x 2 sites x 30 hours per month
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
1.5 x 1999 labor rate
1.5 x 1999 labor rate
1.5 x 1999 labor rate
Objective:
2080 hrs per year x 2 per site x 2 sites
Objective:
2080 hrs per year x 2 per site x 2 sites
Objective:
2080 hrs per year x1 per site x 2 sites
Proposed:
2912 hrs/yr x 3 shifts per day x 2 persons per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
2912 hrs/yr x 3 shifts per day x 1 person per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
DCAA verified 1998 labor categories/rates currently used/paid under existing contract.
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
1.5 x 1999 labor rate
Objective:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA min. DCAA reviewed and took no exception.
Proposed:
Estimate of materials needed, based on 1998 actuals to support minor system enhancements. Also based on historical experience and expectation of increased enhancements required to maintain minimum operational capability. Escalated per DRI/electronic components.
Objective:
DCAA verified 1998 actuals. Tech input states no useage growth. DRI/electronic components used.
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
DCAA verified 1998 labor categories/rates currently used/paid under existing contract.
Proposed:
DCAA verified 1998 labor categories/rates currently used/paid under existing contract.
Proposed:
DCAA verified 1998 labor categories/rates currently used/paid under existing contract.
Proposed:
DCAA verified 1998 labor categories/rates currently used/paid under existing contract.
1998 rate x escalation
1998 rate x escalation
Hours x 1999 rate
Hours x 1999 rate
Proposed:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA/DOL min. DCAA reviewed and took no exception.
Objective:
1.5 x 1999 labor rate
Objective:
1.5 x 1999 labor rate
Objective:
Per DCAA – no exception taken.
Less Overtime hours
Less Overtime Labor $
Less Overtime hours
Less Overtime Labor $
Objective:
Based on verified scheduled maintenance per computer maintenance manuals. Priced using current quotes (decremented) or current discounted catalog prices. DCAA reviewed; no exceptions.
12 months x 2 sites x 15 hours per month
12 months x 2 sites x 10 hours per month
12 months x 2 sites x 10 hours per month
Proposed:
1.3 factor increase over 1998 unscheduled material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.4 factor increase over 1999 minor enhancements material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.1 factor increase over 1999 misc material.
(Minus) -3% escalation in material costs per DRI.
Objective:
1.0 factor (0% none) of 1998 unscheduled material.
(Minus) -3% escalation in material costs per DRI.
Objective:
1.0 factor (0% none) of 1998 minor enhancements material.
(Minus) -3% escalation in material costs per DRI.
Objective:
1.1 factor increase over 1998 misc material.
(Minus) -3% escalation in material costs per DRI.
Objective:
1998 actuals verified by DCAA; Technical input supports proposed useage factor growth of 1.1; DRI/electronic components used for escalation.
Objective:
DCAA verified 1998 actuals. Tech input states no useage growth. DRI/electronic components used.
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
Objective:
Based on scheduled maintenance per computer maintenance manuals. Priced using current quotes (decremented) or current discounted catalog prices.
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable

Option1

PROPOSED

OPTION 1-Proposed/2000 Hours 1999 Rate Esc 2000 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $25.40 1.057 $26.85 $223,386

Progr Analyst II 8,320 $26.51 1.057 $28.02 $233,159

Database Anal/Prog II 8,320 $16.75 1.057 $17.71 $147,342

Computer Spt/Ops II 34,944 $29.51 1.057 $31.19 $1,090,055 Proposed/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $37.54 1.057 $39.68 $693,366 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 840 $40.27 $33,830 Applics Sys Anal II 30 35 40

Progr Analyst II 960 $42.04 $40,354 Progr Analyst II 35 40 45

Database Anal/Prog II 840 $26.56 $22,314 Database Anal/Prog II 30 35 40

Total labor 80,016 $2,483,806

Fringe $1.47 $113,743

Overhead 50% $1,193,654

Material

scheduled 0.941 $225,816

unscheduled 1.261 $190,815

minor enhancements 1.358 $55,325

misc 1.067 $9,108

Total Material $481,063

G&A 25% $1,068,066

Target Cost $5,340,332 Overrun Underrun

Target Fee 11% $587,437 Min/Pess Max/Opt

Target Price Option 1 $5,927,768 Target Fee $587,437 $587,437

Minimum Fee $534,033 Adjustment -$53,403 $256,336

Maximum Fee $843,772 Final Fee $534,033 $843,772

Optimistic Cost $4,485,879 % of Target 10% 16%

Pessimistic Cost $5,874,365 Range Range

Contractor Share % Over 10% 84% 110%

Contractor Share % Under 30%

OBJECTIVE

Escalated

OPTION 1-Proposed/2000 Hours 1999 Rate Esc 2000 Rate Total

On-Site Support

Applics Sys Anal II 8,320 $25.40 1.057 $26.85 $223,386

Progr Analyst II 8,320 $26.51 1.057 $28.02 $233,159

Database Anal/Prog II 4,160 $16.75 1.057 $17.71 $73,671

Computer Spt/Ops II 34,944 $29.51 1.057 $31.19 $1,090,055 Objective/Est’d ON-CALL HOURS/Month

Systems Administrator 17,472 $37.54 1.057 $39.68 $693,366 1999 2000 2001

On-call Support Basic Option1 Option2

Applics Sys Anal II 360 $40.27 $14,499 Applics Sys Anal II 15 15 20

Progr Analyst II 240 $42.04 $10,089 Progr Analyst II 10 10 15

Database Anal/Prog II 240 $26.56 $6,375 Database Anal/Prog II 10 10 15

Total labor 74,056 $2,344,599

Fringe $1.47 $107,628

Labor Overhead 47% $1,087,409

Material

scheduled 0.941 $225,816

unscheduled 1.019 $118,553

minor enhancements 0.970 $28,227

misc 1.019 $8,299

Total Material $380,895

G&A 23% $901,722

Target Cost $4,822,253 Overrun Underrun

Target Fee 9% $434,003 Min/Pess Max/Opt

Target Price Option 1 $5,256,256 Target Fee $434,003 $434,003

Minimum Fee $289,335 Adjustment -$144,668 $154,312

Maximum Fee $588,315 Final Fee $289,335 $588,315

Optimistic Cost $4,050,693 % of Target 6% 12%

Pessimistic Cost $5,545,591 Range Range

Contractor Share % Over 20% 84% 115%

Contractor Share % Under 20%

Company policy that all proposals use this rate
Company management directed use of 11% markup on total target cost.
Company management directed for proposal purposes
Company management directed for proposal purposes
Company management directed use of 90/10 overrun share for proposal purposes
Company management directed use of 70/30 underrun share for proposal purposes
Objective:
Based on verifiable scheduled maintenance per computer maintenance manuals
Objective:
Based on useage growth factor times DRI escalation for electronic components, applied to prior year unscheduled material cost estimate.
Based on use of WGL
Based on technical/cost estimate range… pessimistic cost
Based on technical/cost estimate range… optimistic cost
Based on Govt team assessment ….. Stability of requirement… and need to motivate better cost control by contractor
Govt team agrees with proposed share for underrun.
Instr:
Agree to proposed # of hours/yr. Labor rates proposed based on actuals. Disagree on esclation.
Instr:
Agree to proposed # of hours/yr. Labor rates proposed based on actuals. Disagree on esclation.
Instr:
Disagree on # hrs per month… agree on 1.5 factor for on-call rate.
Proposed:
2080 hrs per year x 2 per site x 2 sites
Proposed:
2080 hrs per year x 2 per site x 2 sites
Proposed:
2080 hrs per year x 2 per site x 2 sites
Proposed:
2912 hrs/yr x 3 shifts per day x 2 persons per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
2912 hrs/yr x 3 shifts per day x 1 person per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
12 months x 2 sites x 30 hours per month
Proposed:
Current company 1998 rate for this labor category
12 months x 2 sites x 30 hours per month
12 months x 2 sites x 30 hours per month
1.5 x 2000 labor rate
1.5 x 2000 labor rate
1.5 x 2000 labor rate
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
Current company 1998 rate for this labor category
Proposed:
1.3 factor increase over 1999 unscheduled material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.4 factor increase over 1999 minor enhancements material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.4 factor increase over 1999 misc material.
(Minus) -3% escalation in material costs per DRI.
Objective:
2080 hrs per year x 2 per site x 2 sites
Objective:
2080 hrs per year x 2 per site x 2 sites
Objective:
2080 hrs per year x1 per site x 2 sites
Proposed:
2912 hrs/yr x 3 shifts per day x 2 persons per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
Proposed:
2912 hrs/yr x 3 shifts per day x 1 person per shift x 2 sites..rqmt is for 24X7 coverage 365 days per year.
12 months x 2 sites x 15 hours per month
12 months x 2 sites x 10 hours per month
12 months x 2 sites x 10 hours per month
Objective:
1.5 x 2000 labor rate
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
1999 rate x escalation
Hours x 2000 rate
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Proposed:
Company policy to propose labor escalation at DRI/ADP+.5%
Objective:
1.05 factor(5%) increase over 1999 unscheduled material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.0 factor increase (none) over 1999 minor enhancements material.
(Minus) -3% escalation in material costs per DRI.
Proposed:
1.05 factor increase over 1999 misc material.
(Minus) -3% escalation in material costs per DRI.
Objective:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA min. DCAA reviewed and took no exception.
Less Overtime hours
Less Overtime Labor $
Less Overtime hours
Less Overtime Labor $
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
DCAA recommendation based on verified 1998 labor categories/rates escalated per DRI.
Objective:
1.5 x 2000 labor rate
Objective:
1.5 x 2000 labor rate
Objective:
Based on useage growth factor(1.0 none) times DRI escalation for electronic components, applied to prior year minor enhancements material cost estimate.
Objective:
Based on useage growth factor times DRI escalation for electronic components, applied to prior year misc material cost estimate.
Objective:
DCAA questioned 3% of the 50% overhead rate proposed for 2000. Based on DCAA’s review of the contractor’s range of forecast business base/sales. The contractor forecasts a dramatic decrease in company business base/sales. DCAA’s recommendation based on use of contractor’s “most likely” forecast of business base volume.
….smaller allocation base for indirect costs. Contractor contends old computer systems that it traditionally supports are being replaced by systems that it has does not have the labor expertise to support.
Objective:
Per DCAA – no exception taken. Compared to 1999, dramatic decrease in company sales
…smaller allocation base for G&A.
Proposed:
Based on useage growth factor times DRI escalation for electronic components applied to prior year misc material cost estimate.
Proposed:
Estimate of materials, based on 1999 actuals, needed to support unscheduled maintenance/repair of systems based on historical experience and expectation of increase in failures. Escalated per DRI/electronic components.
Proposed:
Estimate of materials needed, based on 1999 actuals, to support minor system enhancements based on historical experience and expectation of increased enhancements required to maintain minimum operational capability. Escalated per DRI/electronic components.
Objective:
Based on verifiable scheduled maintenance per computer maintenance manuals
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
G&A base is total cost….including total labor(with o/t), fringe, overhead, total material
Proposed:
Base is labor dollars less overtime/on-call support labor dollars.
Proposed:
Base for fringe is labor hours, consistent with DOL wage determination methodology. Proposed rate exceeds SCA/DOL min. DCAA reviewed and took no exception.
Proposed:
DRI for 1999, electronic components (-3%)
DRI for 2000, electronic components (-3%)
Proposed:
DRI for 1999, electronic components (-3%)
DRI for 2000, electronic components (-3%)
Based on internal estimate of best case cost
Based on internal estimate of worst case cost
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable
Objective:
DCAA recommends escalation at DRI/ADP. Labor Market analysis rationale by contractor is supportable

_992164918.xls
Option2